It's June 2012 and Joey Xoto has just been fired from his accounting job.
To make matters worse, he's about to get married. He needs to make some cash... and fast.
He offers to make videos for an internet marketing coach in exchange for advice and then builds an information product in the video marketing space.
Three more information and two more software products later, Joey teams up with Jamie Garside and David Chamberlain to build Viddyoze.
Fast forward to May 2020, and the Viddyoze team grossed just shy of $3m in revenue whilst investing a total of $80k in SaaS PPC.
This post explains...
Joey has stated that he's been fascinated with video since he was a child. At every family event, he would be filming:
A little later in his life, he also then spent just over two of his working years selling:
So when Joey was fired from his accounting job in June of 2012 and needed to make $30-40k to pay for his wedding in six months time... what did he do?
He turned to two of his passions: video and selling.
He combined these two with the internet to form a potent mix. Let's be clear... video was not a big thing on the internet back in 2012. You couldn't upload video to Facebook, YouTube was not a thing and FaceTime didn't exist. Joey jumped into video before Gary Vee mentioned it in every Instagram post.
Joey found a mentor then started selling information products at the intersection of these three categories. And on March 12th, 2013 at 11am, his first product: Video Marketers Guide launches. The product shares how to create videos that sell (remember his two passions!), this first product grossed $57k (approx. 50% would be paid out to affiliates) and generated 3,000 customers.
Then...
The story continues in the next Growth lever but the point to note here is that Joey has executed relentlessly at the intersection between video, sales and the internet over the past eight years.
There are probably few people in existence that know as much as Joey does about selling with video... through the internet. This is a solid foundation for a SaaS business.
Joey always had an idea for a video animation SaaS that he thought was going to be big. He tried to create an MVP with overseas development teams a couple of times before deciding he needed to do things face to face.
He found two guys from Preston in the north of the UK called Jamie and David to build out the Viddyoze MVP as he knows that he must work with the development team face to face in order for them to be able to make a great product.
Bear in mind that Joey has already built a "buyer list" of over 8,000 customers at this point, he has a reputation and credibility in the online video marketing space.
They launch the first version of Viddyoze on September 29th, 2015 and generate 7-8,000 customers and $500k in a four day launch period. As you will discover in Growth Lever 4, the $500k is generated through a one off payment for lifetime access to the tool, customers are then upsold to a $37 per month subscription.
Shortly after launch, this subscription upsell results in a $1m ARR business.
At this point, Joey moves his life up to Preston and all three founders decide to focus fully on Viddyoze.
Without this, it seems unlikely that Viddyoze would be where it is today.
You may be wondering where all the sales for these chunky launches came from...
The answer is "other people's audiences" or OPA. Joey has been able to cultivate relationships with other influencers (or "guru's") in the online marketing space. These relationships are leveraged to promote each-others products in exchange for large commissions.
If you create scarcity around an event, where a product will only be available for a four day window and then you find 10 partners each with an email list of 50k subscribers... things get interesting.
Once you convince them to promote you (more on that in the next Growth Lever), assuming a 5% click rate per email and that each partner will send an email every day during the launch...
That would be a grand total of 10,000 clicks coming to your sales page and at an 8% buy rate, that's 800 customers. At a price point of $67 on the front end, that's $53.6k in sales.
Joey and the team did this... but at a much bigger scale. We're talking over 100 affiliates, some with email lists of up to 1m subscribers.
The Viddyoze page on JVZoo (marketplace that connects digital product creators with affiliates) shows a total of 227k sales, with 31,500 coming from affiliates:
31,500*$97 = $2,992,500 generated from affiliate partners through JVZoo alone.
Bear in mind that anything between 30-70% could be paid out to partners, it is therefore Viddyoze's responsibility to monetise further on the back end to ensure profitability. Check out the next two Growth Levers to understand how Joey and Viddyoze are doing that...
This is how Joey and the team were able to secure the early funding they needed to move full time onto the project and invest further into development.
Every investor you will ever meet will ask you about Lifetime Value.
LTV LTV LTV
Even my man Akeel Jabber asks this to the SaaS in question on Nathan Latka's recent
.
But what actually is LTV and why does it matter?
Well one of my biggest marketing influences of all time, Dan Kennedy once said:
The business that can spend the most to acquire a customer wins
A business that knows they can generate $200 from a customer over their lifetime will be able to spend more on Google Ads than a business that can only generate $100.
So the game then becomes... how can you maximise revenue per customer in order to spend more on acquisition?
One way of doing this is to promote other people's products, and claim a commission by doing so.
Each year, Viddyoze promote another SaaS product called
of product and created 1,000 new customers for Convertri. With a 50% commission, that's $250k of additional revenue with little cost (just the amount it costs to create and run the promotion).
You can check out the webinar Viddyoze used to sell the Convertri deal here:
That $250k boosts LTV, allowing Viddyoze to become more competitive on their front end paid acquisition (see Growth Lever 7).
This is possibly the most outrageous and impactful Growth Lever in a case study to date...
It throws everything we have learnt during our
careers out of the window.
Here's a typical SaaS monetisation ladder:
Here's the Viddoyze approach:
Before anyone can receive any value from Viddyoze, they need to fork up $67. This gives them lifetime access to the product but with limited video templates.
Right now Viddyoze has two acquisition channels (more on this in Growth Lever 9) with two separate sales pages:
Both of these offer the $67 product on the front end. This revenue may or may not liquidate the amount spent in acquisition through affiliate commission paid to a partner affiliate or ad spend given to Facebook/Google.
Once you purchase you then run through a number of upsells and downsells before accessing the product.
The following page after purchase leverages the human commitment and consistency bias: we are more likely to keep doing something once we have already started.
You are immediately offered an upsell to the subscription plan at $37 per month to access all video templates including the new ones added each month:
You can see the full sales page here.
If you would not like the subscription, you're sent through to a downsell that offers 30 extra templates for a one off payment of $47:
So what is actually happening here?
Let's learn more about this strategy from the man himself... Joey Xoto:
LEARNING: Is there an innovative way you can deliver value to a subset of customers for a one-off investment?
Now I hear all you SaaS geeks out there pulling your hair out saying that the $67 one-off customers won't be profitable as they will be rendering videos for the rest of their life. And that this lifetime subscription will end up killing the business.
That was also my reaction when I first started looking into the Viddyoze monetisation strategy... and then I heard about their monthly subscription conversion figure:
20-25%
Yep, that's right, close to a quarter of the customers that buy the lifetime access will upsell into the monthly subscription with access to all video templates.
How?
Well the first thing that hits me is the congruency of the up sell. It is a very natural progression that now you have the software to edit templates...
On top of that, a large subset of Viddyoze customers sell video animations as their business. In order to stay ahead of your other competitors also doing the same thing, you need the freshest templates.
My personal favourite pitch of the monthly subscription upsell comes from Joey in the welcome video. As soon as you land on the homepage, you see this little popup here:
This takes you to a short video where you are greeted by Joey and he takes you through the process of customising an animation.
It's a perfectly functional onboarding video which will reduce "time to value" and decrease refund rate. But then... as Joey is waiting for his example video to render, you get the pitch for the $37 per month upsell:
I mean, I would recommend jumping and paying $67 just to experience it yourself.
On top of that, you can also opt to view the templates only available in the subscription upsell in your account:
And when you move through the process to customise that template you get hit with the paywall just before rendering... again capitalising on the commitment consistency bias we saw in the previous Growth Lever:
In summary, Viddyoze make a seamless and compelling case for a one off customer to transition into the monthly subscription, leading to an insane 20-25% upsell conversion rate.
Viddyoze's first acquisition channel was partnerships.
They did this for four years and leveraged this channel to sell millions of dollars of software.
But in the background Joey always wanted to try and make SaaS PPC (pay per click) work. They churned through numerous employees, freelancers and agencies until recently... where they found their "paid ads person".
Since the have scaled from $2-3k to $80k per month in paid spend, netting $30-40k on the front end.
When writing this section I planned to research into ad copy, targeting, retargeting etc... but when I started digging into that I found that actually, that is not the important thing here.
The important thing is that Viddyoze both:
Armed with this, Viddyoze can go out and spend heavy on ads to acquire customers, as long as they are within their relatively high LTV.
How much easier would Facebook Ads be if you could triple the amount you would be happy to spend to buy a customer?
However, there is one cool ad I would like to share:
This ad is sent JUST to new Viddyoze customers and has cofounder Jamie requesting that people comment "Yes" to receive five free templates and some advanced training on how to use the product (presumably delivered automatically using a Facebook Messenger Bot).
This is adding value to the customers, showing Facebook that people love your ads, reducing churn and getting customers in the habit of adding new templates into their account... priming them for the $37 per month upsell.
SaaS PPC at its best.
Now this is a tricky one for me to articulate.
There is something different, congruent but substantially cool about Viddyoze. Their content, founders and office all give off a vibe that suggests more "tattoo parlor" than "SaaS business".
I think what I'm trying to say is that Joey and the team have clearly spent the time to think about their brand, design and ethos. And this bleeds through everything they do.
Their office:
The design of their podcast site:
Even the design of Jamie and Joey's skin is brand aligned:
The point here is not that you need to graffiti your walls and add a spaceship-esque room at the top of your office, it's to spend time understanding who you are and what you stand for... and then work out how you communicate that to the world.
E.g. your brand
Now I'm sorry this Growth Lever is not insanely actionable, but I can't help but thinking that Viddyoze would not have been able to reach the numbers they have without having a clear understanding of who they are and how they want to portray that to the world.
I often advise new SaaS founders or marketers on the importance of focus in your early days of growing a business:
Choose one channel and get it working before moving onto the next one.
This is purely because when you are starting out... it is hard enough to get one channel working, let alone five.
The Viddyoze team have taken this approach to the extreme.
For their first four years of existence, they executed on one single channel: affiliates (Growth Lever 3).
And it was only recently that they started to scale paid spend (Growth Lever 7).
Contrast this to most SaaS businesses spending time and energy on:
All of which are valid strategies, but to make any work... it will take significant time and effort. So if you're bootstrapped like Viddyoze, then you need to ensure you focus resources.
To understand the extent of this focus, let's check out the Viddyoze content marketing and SEO strategy...
Up until the release of their new podcast, it basically didn't exist:
In fact, they could have the lowest keyword:revenue ratio of any SaaS business out there.
Let's assume Viddyoze are on $24m in annual revenue... and 422 organic keywords. That's a 56,872:1 ratio.
Comparing this to Sales Hacker, which I expect to have a similar, and maybe slightly lower revenue figure:
They have a 429:1 keyword to annual revenue ratio.
Furthermore, the content marketer in me is extremely concerned when I see that Viddyoze don't even have a blog:
They don't have a blog .
Which may explain a relatively low referring domains figure: just 896 referring. To put this in perspective, SaaS Marketer has built up to 106 referring domains in the three months since launch and will probably hit 1,000 in our first year (send an email with subject: "It's time to link" to
if you would like us to link to you...).
But that's our model, right now we're optimising for content and search. Joey and Viddyoze are optimising for extreme value delivery through their product.
The moral of the story is this: find your channel and keep going until things are getting ridiculous.
Let's here more from Joey about this intense focus:
What did we learn?
Which was your favourite Growth Lever, please leave a comment on the post below...