Andrew: Hey there, freedom fighters. My name is Andrew Warner. Guys, how many freaking email marketing companies are out there? Software to send out emails and how could so many of them be doing well? All right, joining me today is an entrepreneur who said, “I see that there are people sending out email. I see that there’s software to do it. I’m jumping in, I’m doing it too.” And the reason that he was able to do it, he says is because he saw a problem that nobody else addressed because he was dealing with a market that other people weren’t familiar with and he jumped in and guess what the guy’s doing well.
Let me introduce him instead of shouting about him. His name is Rytis Lauris. He is the founder of Omnisend. It’s an . . . Listen, this is the description. This is another thing that all of these email marketing guys do now, omnichannel marketing automation tool for e-commerce.
I’m a little concerned and we’ll talk about that, that when you say that people don’t understand that it’s email. I almost feel like you need to emphasize that we do email marketing. And by the way, all the other stuff we’ll bring into. All right, we’ll talk about why he’s doing it that way and so much more thanks to two phenomenal sponsors who really believe in our success as entrepreneurs and want to support it. The first we’ll help you hire great developers is called Toptal. And the second, if you’re hosting a website, we’ll help you host it right. It’s called HostGator. We are here to help you build better, bigger companies that you could be proud of. And in this interview, we’re going to find out how Rytis did it. Rytis, before I get into all this other stuff you can see I’m passionate about this. Let’s talk revenue. How much revenue are you producing?
Rytis: Our ARR, which is, we are size business or any little current revenues, but the most important metrics is a bit, above 6 million.
Andrew: Whoa. This is even bigger than when you talked to our producer.
Rytis: Yeah, we are growing. We are growing. So our year to year growth is almost three times. So, you know, three or four. It’s bigger than I talked to your producer.
Andrew: Good Lord. Any outside funding?
Rytis: No, bootstrapped.
Andrew: But what about this, there’s so many freaking email marketing companies out there, there are tons of companies that will do . . . I listen to NPR, they do an ad for one now. That’s how like every everyday use it. Why are there so many succeeding?
Rytis: Because the market, the addressable market is so big and email as a channel is so important and so preferred from the people. You know, a lot of research has shown that email is still the most preferred channel for the brands to communicate to people.
Andrew: Yeah, I get that. I’m sorry to interrupt, but what about this? Look, when it comes to website hosting, the company that’s sponsoring me, HostGator, we all know it’s part of a bigger company called Endurance. They own just about all these other WordPress hosting companies. So you’ve got them, you’ve got WordPress, you’ve got Squarespace, you’ve got Wix. I can name them in under 10 and the rest are basically dead unless I’m missing something. But into . . .
Rytis: That’s correct.
Andrew: Actually, maybe I’m exaggerating with 10 but there aren’t that many players. Why is email so different? I have one theory about it, but I’d like to hear what you think.
Rytis: That’s a good question. So I’m not sure about like the historical part of it. So currently, and I know why the Omnisend is succeeding because we have our own niche. And what definitely what’s happening now in the email field, which is not the email, it’s not a case anymore. Still, it’s the massive majority of the messages we send through email. Although we have all those channels in place.
Andrew: Yeah. We should say Facebook Messenger. I could send messages through, I could send text messages and I think others, I don’t remember.
Rytis: Web push notifications, messages, fiber messages, and you can synchronize with your Google and Facebook ads. It’s all in one tool and all in one place. So it’s far beyond email, but for sure email is still the most important channel for us and for our customers. And so email is going to verticals and if like Mailchimp was one fits all solution for quite a long time and like Aweber, Constant Contact, there all those dinosaurs, giant companies. But email is going to verticals and there are great solutions as Omnisend who are serving e-commerce. There are other great solutions who are serving, let’s see, bloggers and there are even great solutions who are serving lawyers specific niche and those . . .
Andrew: Really?
Rytis: Yeah, there are solutions in the market. So and you know, all of those were doing pretty well. And so I would say the new trend and then reason, why Omnisend is still doing well, is because we’re focusing on the niche which is by itself it’s growing.
Andrew: E-commerce?
Rytis: Very fast 20 . . . Yeah. E-commerce, yeah. 20 to 25% annual growth like globally for e-commerce businesses in general, it’s one thing. Another thing we are really helping, we’re solving the more tangible pain for those businesses. Because customer retention is a huge challenge. As you know, acquiring a new customer becomes more and more expensive, like doing it via Facebook or Google ads. They became like insanely expensive of those two companies, technically kind of made a monopoly of customer acquisition channels. So there are no other channels to acquire customers or affordable channels. So start working with customer retention is very, very important.
And for e-commerce email, like if you do it properly, retention marketing done via by email generates like 15 to 30% of your revenue. Therefore, it’s very important for them to do this. And you know, we are glad to help and they’re glad to pay for us since we provide them with a good quality of service.
Andrew: Give me an example of what you do differently than . . . You mentioned Mailchimp, so I’ll go with them. Let’s say somebody has a MailChimp email list, they could send out messages, right? What do you guys do differently because you focus on e-commerce?
Rytis: Yeah. So starting from, we have a lot of best practices in place, made us like ready-made templates. What you can do to email, workflows, email sequences, however you call it? So let’s say we know that it’s very, very good to remind your customers about abandoned carts, about abandoned visits, about . . .
Andrew: Oh yeah, abandoned carts is huge, right? Somebody adds something to your shopping cart. They don’t complete the purchase. You send them an email, boom, it comes in. What about follow on? Somebody gets a receipt for a product they purchased. You also customize the follow on messages based on what they bought?
Rytis: Yeah, exactly. And let’s say someone has been buying from you, but you haven’t seen the customer for three or four, six months depending on your sales cycle. And we automatically started the campaign to reactivate this customer. You can do a lot of workflows, generic email service providers, but it’s not in place. The data is not synchronized. So the key thing is really behavioral tracking as we do synchronize the data with your online store backend as well as we track your front-end. So it really enables us to automate those marketing activities and do it specifically what’s important for e-commerce, why have a flow which really, you know, earns the money, earns the money for online stores.
Andrew: Here’s my theory. Here’s one of my theories on why there’s so many. You’re convincing me and obviously explaining to me the importance of customization for email. The other one is price. People don’t spend that much on web hosting. I’ll talk in a moment about my sponsor, HostGator. It’s like 384 or something like that, a month? That’s peanuts, but email marketing, it’s not at all unusual for a company to spend more in one month on their email list than it is to spend for a whole year of web hosting. Right?
Rytis: That’s correct. But it’s still is . . . But look, email is a piece of marketing. So within the marketing budget, usually paying for a tool, I would tell them to send to other tools. It’s still a very, very small amount comparing to the budgets to spend on Facebook, for Google, and the rest. [inaudible 00:07:44].
Andrew: Right. So you’re saying it’s more expensive, it’s still tiny compared to email marketing?
Rytis: Yeah. That’s true. Yeah. There are different departments, especially if we talk about larger companies. So those who pay for servers and those who pay for email service providers, those are different departments. Usually, the tech department pays for servers and marketing department pays for ESP.
Andrew: And that’s interesting too because the marketing department has a bigger budget and much more freedom, right. I didn’t think of that.
Rytis: Might be. And a vast majority of those companies are competitors. They are bootstrap, like a lot of bootstrap companies in this place. And this business is quite profitable. It has good margins in general and it creates value for customers. So I guess that’s the reason, that’s the reason why there are so many solutions in the market. And a lot of them do quite well.
Andrew: Let me get into this, by the way, Greg’s in the audience is asking, can we see a demo. You saw one before we officially started recording here today. But you can just go use their software for free. It’s one of the few email companies that lets you just go try their software for free and see what it’s like.
Rytis: And we have free demos on our website. So just visit there.
Andrew: Yeah, It’s a whole free tier.
Rytis: Yeah, free tier and we have demos as well. So you can book a demo with our sales rep and in half an hour he will professionally show all the capabilities. So you can do it on our websites.
Andrew: I’m hearing an accent. You’re from Lithuania?
Rytis: That’s correct.
Andrew: You are. Did you grow up there?
Rytis: Yes, I was born and raised here and living here.
Andrew: You’re still in Lithuania?
Rytis: Yeah, I’m in Lithuania. Yeah, I travel a lot, but yeah, this is where . . .
Andrew: Pretty shocked because you’d be doing it this late. It’s 4:15 here my time. What is it, midnight?
Rytis: Two a.m.
Andrew: Two a.m.? Oh my God. Wow. Thanks for doing this. Why are you staying in Lithuania?
Rytis: [inaudible 00:09:40]. I travel a lot. I travel a lot. I really love . . . And it’s like we have started here and a vast majority of our team is here and doing self-serving business that’s absolutely okay. So I spend a lot of time in London, two hours flight, really convenient, four flights per day. So really well-connected. So we do a lot of business. Then I do travel to the U.S. a lot as a vast majority of our businesses are actually coming from the U.S. More than 60% of our revenues coming from North America. The U.S., with a little bit of Canada added on top.
Andrew: Drew in the audience and John are saying because he lives like a king on $5,000 a month. Now that’s kind of their kind of being silly. But there’s some truth to that. What I’ve noticed as I’ve been traveling around the world watching entrepreneurs is it doesn’t cost that much to live outside the U.S. You get fully connected. You do have to deal with like late-night calls like this sometimes. But overall the value is enormous. Right? For [inaudible 00:10:48].
Rytis: Yeah, that’s correct. That’s correct. I mean there are advantages and disadvantages and yeah . . .
Andrew: Be more specific. What’s an advantage about living in Lithuania that we wouldn’t know about until we got there?
Rytis: So like talking about the Vilnius which is a capital city of Lithuania. So this is a very tiny city, but you have like . . . but it’s already capital. So you have all the vibrant things which you have usually in the capital cities in large cities. I mean a lot of events, a lot of like things happening. A lot of nightlife is great here and a lot of bars, which are open till 6:00 a.m., etc. But at the same time, after like getting out of a bar, it takes you 15 minutes by taxi to go anywhere. Should not feel asleep. And you know, the airport is very tiny. So you just land, it’s the ground and it takes, let’s say, myself where I live, it takes me like half an hour I’m at home. It’s not the case in the largest city. So it’s very green. It’s a lot of nature here, etc.
Andrew: What about costs?
Rytis: Yeah. A lot of talents, a lot of talents, especially in tech. Yeah. So those are upsides. Downsides that we don’t have a lot of like very experienced people. That’s a downside. We don’t have like . . . we have to build a network being in remote, we have nine graduated like, you know, MIT, Harvard, Stanford, etc., where you already have all the connections in place. So you have to create those connections after you have started your business.
Andrew: What do you pay for a developer? What does a developer cost there?
Rytis: It depends like junior to senior, but yeah, it might be like gross cost starting from like 2000 going up to like a 4,000, 5,000.
Andrew: Two thousand to 5,000 a month.
Rytis: Yeah.
Andrew: Wow. That gives me a sense of the cost. It’s your third attempt at a company. Before we started, I asked you about this one company that I know you launched a previous to Omnisend, IQ Polls. I asked you where it was, you said basically it’s in maintenance mode. I’m not there day-to-day. As far as, you know, you don’t even have like a daily insight into what’s going on at the company. But you did have insight into why that one didn’t take off the way that Omnisend did. And I thought that was interesting to talk about. What is it about this feedback platform that didn’t do as well?
Rytis: Yeah. So, IQ Polls was a very, kind of interesting startup. I was invited there. I was not kind of that the person in whose mind came the original idea, but I joined as it as a co-founder there. And the key lesson which I have learned there and I guess all of the founding team have learned there is really, that was a nice to have a product like all the conferences, seminars or the organizers if you give it to a free, it’s a fantasy thing. They love using it, but once you ask them to pay for it, they say, “Oh, I’m not true if I really need it.”
And so this is the lesson which I really brought to Omnisend that, you know, it’s very important from the very beginning to find a monetizable customer pain. To help customers solve something for which they are willing to pay. If you do not do it from the very beginning, if it’s just a vitamin, if it’s just a nice to have things, so that customers will not be willing to pay for you. And yeah, so might be, you know, like raising a lot of money and then make you get this industry standard and maybe like D-round or E-round investors is going to find a way how to monetize this business. But as we’ve chosen like an about another path here. Omnisend is really trying to find them a monetizable customer pain from the very beginning.
Andrew: Monetizeable customer pain. The polls are not addressing the pain and it’s not monetizable because people aren’t earning money on it. Okay. You were also working . . .
Rytis: Conference organizers, they’re organizing their conferences, their events and we were targeting those, not online events, but like offline events, like people gathering.
Andrew: That’s what you were doing with IQ Polls?
Rytis: Yeah, that’s correct. People gathering in big hall, you know, having a seminar or a big conference, etc. And there’s a presenter on the stage and asking the audience feedback live and IQ Polls helped collect this feedback and you know, show it on the big screen and live. It’s fancy but it’s not the thing you are willing to pay for.
Andrew: Okay, makes sense. And so you are working at your digital marketing agency Soundest and I’m guessing what happened was you were working with a lot of e-commerce companies and you’re starting to see that there was a problem there?
Rytis: Absolutely. That’s . . .
Andrew: Talk about the problem as you experienced it. Do you have an example of it?
Rytis: Yeah, so back in the days, so we have launched the product which currently is Omnisend like five years ago. Two years we didn’t manage to or to earn any money from it. As you know, even in this very, very, I would say very competitive and very trivial market as email, email service. At that point that was completely like email service providers. So we saw that there is an opportunity and there are specific needs by those who do sell online, but those generic email marketing tools, they do not cover their needs and . . .
Andrew: Do you have an example of a customer who needed something that you can do? Yeah. What was it?
Rytis: You know, so back in the days, the automation flows as trivial as like abandoned cart in mind. Their welcome campaign was not that trivial and those generic email service providers, they did not provide such automation. So you were capable to some bulk email campaigns but not automate anything. So really we saw that you know if it went to automate something you have to do what? You have to code, you have to write custom code and then plug into like Mandrill, Mailgun SendGrid about like the transaction email service provider and then send emails and have no analytics, no data, no single customer profile. So we saw the opportunity here and you know, our I will promise at that . . .
Andrew: I’m sorry, I don’t understand. Let me see if I can back up and get this. You were working with e-commerce companies, but you were specifically working on their marketing. Were you also focusing deeply on email only for them or were you doing everything?
Rytis: No.
Andrew: No, you’re going beyond on email. Okay. And so why couldn’t you just say, “You know what guys, we’re going to use MailChimp. We’re just going to go with what’s out there.” And you did?
Rytis: Yeah, we did. And we saw that, you know, MailChimp does not fulfill their needs.
Andrew: Can you give me an example of something that you had to code for them? Do you have an example of something that you did for a client?
Rytis: Yeah. Abandoned cart reminder messages.
Andrew: Abandoned cart. And so how did you create it with Mandrill and your own custom setup?
Rytis: Yeah, so we just, you know, code a script, intermediate script and then apply Mandrill as transactional, purely transactional service. You create an email, like you pick up the data online store, like trigger you have to pick on your own, the trigger. You have to pick products, like product data, images, supplies names, etc. Put it in that template and give it to Mandrill just to send it over.
Andrew: And you would custom create this for your clients.
Rytis: Exactly.
Andrew: You’d have developers do that for your clients.
Rytis: Yeah, exactly.
Andrew: Wow. Okay.
Rytis: Back in the days there were no tools affordable for small businesses who have been doing this. There were great solution as like Responsys at the time, ExactTarget, Silverpop, those enterprise-level solutions, they were doing it, but there were no small and medium business solutions who are doing that.
Andrew: Got it. All right. And so you were coding this stuff for people.
Rytis: Things have changed.
Andrew: And we’re not talking that long ago. I think you started that company in 2012, right? That’s when you created Soundest? 20 earlier in 2009.
Rytis: Yeah. The agency, yeah, it was 2010, I guess just something.
Andrew: I think part of my confusion as I’m looking at over as I’m looking at soundest.com but before that, you had a soundest.it or L-T? Am I right? Or L-T?
Rytis: Yeah. L-T. But yeah, none of the websites exist anymore.
Andrew: Oh no. Internet Archive, baby, it’s taken me back. I’m going in the Wayback Machine. I see what things are like. All right. And so as you were building this thing up, you saw this is a problem. Did you start coding up a solution at Soundest, at your agency?
Rytis: Yes.
Andrew: You did.
Rytis: That’s actually the pure spin-off from agencies. So vast majority of the team . . . Not a vast majority, the team is big enough now, but the core of the team, those are guys who were together myself, back in the days of the agency.
Andrew: And it’s very important.
Rytis: It’s very important once you start a startup, it’s one of the lessons I have learned here, that, you know, having the team in place already and have kind of cultural fit already and not wasting and spending a lot of time to find like new founders, to find the new people to work with you. That was very, very beneficial for us as well as kind of some lessons learned while building IQ Polls. So the core of the team was the same with which we already felt while building IQ Polls.
Andrew: Let me take a moment and talk about my first sponsor and then we’ll get into the first version of the software. Whether it was a standalone product or part of your agency, doesn’t matter. We’ll just see what that first version was and how you got your first customers. But my first sponsor is a company called HostGator.
Now listen, I know you guys work a lot with Shopify. Let’s talk about HostGator as an e-commerce platform. What’s an advantage for somebody who goes and gets a HostGator account and says, you know what, I’m not going to create a WordPress blog. I’ll create a woo . . . What do you call it? A WooCommerce online store.
I know that some of the advantages with Shopify are that they’re more plugins, that there are more features directly for e-commerce. What advantages do you see with WooCommerce as a free installation on a service like HostGator? I know one. Want me to go first? You do. Okay. All right.
Here’s one of the big advantages. One of the big advantages is easy to start for free essentially, right? You’re paying for hosting, but to start for free to play around with it, see what works and then if you don’t like it, you dump it and move on.
The cost of WooCommerce is super low. The flexibility to do whatever you want is really incredible, right? We’re seeing with other platforms, if it’s hosted by someone else, there’s a chance that they take it away. There’s a chance that they say, what you’re doing is not right, and I’m not just talking about a clear hate speech, but we’re seeing examples of people who are selling things that let’s say, what is it, CBD or whatever that is. That’s part of like connected to marijuana in some way. I don’t even know what the connection is, but there are people create products with that and then suddenly see that their stores is closed.
You have WooCommerce no issue with it. You create it, you keep going. Another thing is to create as many stores you want. It’s all WordPress plus one plugin, which is a WooCommerce plugin. And does it integrate with Omnisend? You bet it does, right? Yes.
Rytis: It does.
Andrew: I see you’re kind of being mum. It’s almost like you don’t want to say that it’s better than Shopify. I’m not going to take a position and say one is better than the other. Is that why you’re being mum?
Rytis: Oh no, no. Sorry. I just was reading comments and . . .
Andrew: Oh yeah. Okay, from people.
Rytis: You were addressing . . . I was [inaudible 00:22:21].
Andrew: Yeah, from the live audience. I’ll let you. Good. I’m glad you’re talking to them. Feel free to type into them. So I’m going to tell you guys if you’re listening to me, whether you have an idea for some kind of online store or an idea for a blog or an idea for just a webpage that will just be your landing page to represent your idea to the world.
If you bring it to hostgator.com/mixergy you will get an incredibly low price almost to the point where you go, “How could these freaking guys afford to do it?” Here’s how. Number one, they own just about every hosting platform out there. Number two with HostGator, once you grow, they’re going to offer you other services and that’s where they’re going to make money on you. I don’t believe, I could be wrong, but I don’t believe they’re really making serious money on you guys when you get started with them. I think as you grow, then that’s where the opportunity comes for them. hostgator.com/mixergy is super inexpensive and super effective. I’m really happy with them.
Oh, look at this Drew saying “Learn to code” is banned from Facebook. Really? I had no idea. Yeah, it’s like random stuff is now getting banned all of a sudden. First version-
Rytis: Why is it so? I’m not sure.
Andrew: I’m not sure. I don’t know what “Learn to code” is. Why would “Learn to code” get banned for considered hate speech. Really?
Rytis: It’s so strange.
Andrew: It is strange. It’s unexpected. I’ve heard about certain coding sites being banned because it’s kind of technically hacking even though it’s not really . . . I’m looking it up. I’ve never seen . . . I didn’t anything like this, I can’t verify that.
Rytis: There’s a question if Omnisend is affiliate friendly? So MailChimp hates affiliates. So we do love affiliates.
Andrew: You do, okay.
Rytis: Those customers for us, we do have an affiliate program as well in place. So I guess that was the question.
Andrew: Yeah. By the way, I looked it up, I had to do some research on it. It turns out it’s not learned to the code being banned by Facebook being banned by Twitter. Go figure. What, is this? According to “Reason” magazine. Yes. You can get kicked off Twitter for saying “Learn to code.” I got to dig deeper into this. This is kind of a weird thing.
Rytis: Wow. That’s so strange.
Andrew: Apparently it’s part of a meme that then it probably someone has taken over.
Rytis: You know, learning to code it’s really a big trend and it’s in like in Lithuania it’s global that people see that. You know, developers are those who kind of do earn a lot compared to other folks in the markets. So, we see the trend that, you know, those at the age of like 30, 40, they change their career path and they do join like coding schools. They spend like half a year and learning some basics and then join some companies as like junior developers, yeah, to start, you know, working and increasing their best skill set there. Growing best skill set there.
Andrew: Sorry, I’m a little distracted by this. Learn to code thing. Here’s what it is. Apparently, people are mocking journalists online who get fired by throwing their old headlines back in their faces about learn to code. It’s like, so now they’re saying to them if they’re laid off, “learn to code.” And Drew in the chat is saying people are throwing the phrase “learn to code” even at like Uber drivers who are suffering. So if you suffer and someone says “learn to code,” it’s their way of just being snarky at you. And that’s why I “learn to code” can actually cause trouble type of harassment. Got it. Got it. Got it. Got it.
Rytis: That’s a story. There should be a story behind everything.
Andrew: There is. I got to put that stuff away. So the first version of the software, it looked like, what? Was it an internal tool that you just used yourselves?
Rytis: Yes. Yeah, it was very first like four. We built it for a few customers of ours. So like agency customers, existing customers. So that was a creed, now I can say . . . It’s crap, not creed. Sorry.
Andrew: You actually told that produce, “Look, I honestly can’t believe people paid for it.” Why? What did it have in it? I say right. You want to launch when it’s that way, but why?
Rytis: There was nothing bad. It just was so MVP.
Andrew: What did it have in it?
Rytis: So it had the capability to send like bulk email campaigns with so limited capabilities to build a beautiful email and very, very few basic automation. And I would say user experience was not best and interface by itself and it was sometimes clunky and some of the buttons didn’t work.
Andrew: People can’t see it. You are smirking so much as you’re talking. It’s like such a . . .
Rytis: But that’s the way you should, I guess, build all of it.
Andrew: To understand why. What is it that made people want it despite all of these flaws. That’s the heart of the, of the lesson here. What was it? You tell me.
Rytis: That it was automation.
Andrew: The automation.
Rytis: We build a low CS especially made for e-commerce, specifically . . .
Andrew: The shopping cart abandonment.
Rytis: Yeah.
Andrew: Got it.
Rytis: All the follow-ups like welcome campaigns, but not just sending hey campaign, but adding products to your welcome emails and really trying to convert your customers like visitors, those who subscribers into paying customers. And data-wise we from very, very beginning, we have started synchronizing the data with the online store. That means that you can create a segment based on some behavior. Again, it was very, very basic back in the days but it works. So that was the reason why customers were paying for us. Even then that we had just an MVP.
Andrew: Where selling initially to your consulting clients?
Rytis: Yes.
Andrew: You did. I got it. So you went to them and you said, look, this stuff that I know that you wanted to do, you can do it with the software. They started buying . . . By the way, as you’re smiling and I’m pointing it out, John in the chat is saying “Good for him. I’m so happy for him since this is a huge win and it’s only going to get better.” So, and then Drew is saying, “What percentage of your sales come from cart abandonment right now? As sales increases?” It seems like that’s the big one.
Rytis: Yeah, it is. So it really depends on your business and we do have a lot of statistics. You can find it on our blog and we do have a lot. So, it really depends on the business. I cannot come up with like an average number now. But yeah, you can check on our blog. We do have a lot of researchers and we do publish a lot of data about all the statistics. So including cart abandonment.
Andrew: You told our producer, look, one of the first things that we tried to do was get into the online platforms like Shopify because they kick in customers too, right?
Rytis: Yeah, that’s correct. Yeah. So there were beginning . . . So first our first customers were our agency customers. So then we start like looking broader and where can we bring our product? To whom can we bring out products? So the first platform when we saw okay there are those platforms who they have app stores or add on stores or plugin stores and all those. And the first platform we have integrated with was Tictail. I’m not sure if you’re familiar with it.
Andrew: No, what is it?
Rytis: Yeah. So it’s like, unfortunately, has been like, you know, acquired. I think it was for acquisition, something like this by Shopify half a year ago. So that was a Swedish European startup. Again at that time that was very successful and people were estimating them with the great success and then comparing one with Spotify, which is a Swedish company as well. And then they do very well. They kind of, they wanted liberalize e-commerce and bring to everyone like super easy to use solution. We can just start your online store with your Facebook account and like 10 minutes and no need to code anything now. There is no even the need to pick a template.
So with Shopify, you need let’s say four hours, probably six hours to properly set up a store. With Tictail, it took you half an hour to set up a very basic version of the store. So, and they were growing really as crazy. So we saw the opportunity then we have made integration with Tictail.
Shopify was the second platform we have made integration then followed by BigCommerce, Magento, PrestaShop on the platform. WooCommerce, which you have been mentioning here. So, I mean there are different platforms, which really are great in different occasions and can serve a different kind of customers very well. So I don’t really prefer none of those platforms. And it depends on your needs.
Andrew: Because what happens is, this is people who have a Shopify store will go into the Shopify plugins section or what do they call it? The Shopify . . . ?
Rytis: App store.
Andrew: App store. Just like I go into my iPhone’s app store and just see what’s new and they are willing to install it. They know that they have to pay through Shopify or they could pay through Shopify. Right? But it’s not required. So it’s easy billing. Am I right about this?
Rytis: Yeah, that’s correct. And yeah, so those app stores, it’s the one thing that just app stores where people are exploring and looking for different solutions. And another thing is really those platforms we do have an ecosystem. We do have agencies working for specifically with a platform and for the platform customers and selling. Let’s say Shopify customers, Shopify agencies, Magento agencies as well. So those are kind of rather closed communities. I mean they are open, you can enter those easily. But those communities and those ecosystems exist. So part of just being listed on the app store, we do a lot of SEO, we do a lot of cross-marketing activity with other service providers there, we do cooperate with agencies within that ecosystem, etc. So that’s what really helps us to acquire new customers.
Andrew: And so one of the first things you said was, look, if we’re going to be getting our customers from those app stores, we need to find a way to rank higher. And so you were looking for ways to get people who liked your software to go and give reviews to increase your search results, placement in the app stores. What worked for you for getting people to leave reviews?
Rytis: Asking.
Andrew: Just asking anyone who’s on it?
Rytis: Just asking.
Andrew: Was there a time when you did it? Were you personally doing it?
Rytis: No, but yeah, that was a time at the very beginning, I was personally doing that because we didn’t have like, you know, a team and there were no support people there, so everyone was doing everything. When we have started like, I guess we eight of us. Yeah. And then we just made the decision to ditch agency and then really focused on, on the product solely. So at that time, we were eight. So, you know, everybody was doing everything. So asking people for review, if you see that the customers are really happy with your solution. So just ask and you know, that’s it’s so strange that a lot of businesses they are not asking for good reviews.
Andrew: I never do. You know what? I know that in the iPhone or iTunes, what is it called, the podcast app now and on the iPhone if I get reviews, it does me well. I just feel like, why am I going to waste people’s time asking them to do something nice for me? And so I never ask. I always see people as selfish and I want to appeal to their selfishness in a good way. I feel like if there’s nothing in it for Drew who’s listening right now, why should he even bother? But as a result, I don’t ask for it. That’s a mistake?
Rytis: Yeah, you should do that.
Andrew: I should do that.
Rytis: Yeah. You should ask because it’s very basic psychology fake. I mean, let’s say very, very to trigger a situation in life. I mean, you just dropped something on the ground. They’re going to be very kind people who will help you without asking. But there will be people who just will be looking at the situation and they will not willing to help you proactively. But if you would ask, just there very few people would, you know, say, “No, no, come on. I will not help you.” It’s very basic psychology, you know. [crosstalk 00:34:27]
Andrew: Is it asking one on one?
Rytis: It doesn’t matter.
Andrew: It doesn’t matter. Is asking my whole email list, ask here within the podcast, ask. Just keep asking, rate and review.
Rytis: Yeah, Just keep asking and okay. So in our case, we needed to nail the process and define the exact moment when it’s the best moment to ask for it really. So in our case, it’s the best moments are, it’s like after a support ticket has been closed. Once, so that means that too. They were in more kind of personal conversation with us. It’s one thing, another thing we do have NPS, NPS surveys. So if someone is rating us very good. So we, okay. So we already know that you are happy with our solutions. So we ask to leave the public review as well.
Andrew: Yeah.
Rytis: And yeah, another point is when someone complete something, let’s say in your cases as you do podcasts. So if you somehow manage to find a way to ask exactly after a podcast. So in our case, when someone sets up either automated campaign or completes a bulk campaign, so this is the best to ask again because the person feels relieved, “Okay, I’m done with my job. I have some free time. That’s okay for me spend few minutes.” If you keep like, you know, popups, let’s say appearing while I’m in the middle of the process, which is the most important for me now. So of course, I’m just going to be intrusive and going to, you know, close it and say, “Okay, what are those guys doing here?” So finding a good moment is important as well.
Andrew: That makes sense. Drew in the chat . . . Drew is basically doing his own little podcast in the chat. I can’t stop watching what he’s chatting along. For those of you who don’t know, I’m doing the day of live interviews here, recording them for our podcast and we’ll be publishing it. And Drew is one of the people who’s listening. John is the other one who is super active here. Drew is asking about calls. I know that from your conversation with our producer here at Mixergy that you guys decided we are going to work on our NPS, our Net Promoter Score. And one of the things that you decided to do was get on more calls and do in-person meetings. How did you do that? And what were the results?
Rytis: Yeah. So, the early days was very important for us to really start sort of meeting our customers in person. So that was really done by me. So it just, you know, I kept writing emails and inviting our already existing customers to meet in person and preferably me visiting them in their working environment to really understand how do they live, how do they work, what they need . . .
Andrew: You just ask them you’d say, “Hey, I see that you’re one of my customers. Can I come into your office?”
Rytis: Yes. That’s correct.
Andrew: Okay. All right.
Rytis: Because I wanted to learn . . .
Andrew: Does it have to be where you are?
Rytis: Sorry.
Andrew: What city does it have to be in? Does it have to be in your city?
Rytis: No, no.
Andrew: Does it have to be in Lithuania? Anywhere?
Rytis: Anywhere. I was always travel a lot and you know, mainly it was London. I used to live in London for a while. So I was there and then, yeah, mainly it was London and some [inaudible 00:37:44] as well just, you know, I was traveling with them trying to arrange as many as many meetings as I can to really understand how do our customers live. How can we help them and what is the real feedback about the tool. You know, once you talk in person, the feedback you receive is completely different comparing to just, you know, NPS scoring or just, you know, some public reviews.
Andrew: What would you do? You would go through your customer list, see who is using it a lot, who’s using the software a lot? Am I right. And then say, you know what, this person happens to be in London. I’ll ask if I could come to their office.
Rytis: Yes. That’s correct.
Andrew: Interesting. And you would do it on the phone?
Rytis: Yes. And yeah, on the phone and like by email, etc. And you know what I have learned, especially those like smaller, smaller online retailers as at the very beginning, we were focusing us on those micro, micro to small businesses like online entrepreneurs who usually on own are small teams of two or three people there. So what I found there that just very few of them wanted to let me in into their offices.
Andrew: Really? Why?
Rytis: Because usually for those like beginners, you know, your office is your sleeping room, the warehouse, your warehouse if you sell online. So usually you need to have a warehouse. So your warehouse is just, you know, in front of your sleeping bed.
Andrew: Yeah. So it’s so personal.
Rytis: Yeah, it’s very, it’s very personal. So therefore I was so was there arranging meetings to some cafes, etc. And once we have started growing, so the customers became larger as well. And now it’s very good to get occasions to meet customers in various trade show conferences, which are related to e-commerce, digital marketing, etc. So will you start meeting your existing customers? So you meet the prospects there and it’s a great opportunity to meet and talk to them there.
Andrew: So I want to know what you learned by being in somebody’s home in the early days and getting on calls with them. But let me first take a moment to talk about my second sponsor, then we’ll get into it. My second sponsor actually picked up on something you picked up on, which is there are phenomenal developers who don’t live in San Francisco, who don’t live in Silicon Valley. They just live wherever they happen to grow up or wherever they happen to enjoy. Lithuania, Bali all over the place.
And so what they decided to do was assemble a collection of those developers into their network, make it really hard for people to get in their network. But if they got in their network, they knew they were the best of the best and make them available to companies like yours. So if you need to hire someone, like imagine this, Rytis, if you say, you know, we need a mobile app, but our team never developed a mobile app. Yeah. You can start waiting and teaching and so on. Or You could say, you know, “Toptal, we are an email service provider. We need a mobile app. It has to be iPhone first and then android. We want somebody who built both and has created one for an email service provider, find it for us.” And they’ll go to their network and they’ll find people created apps. It’ll blow you away and then you can talk to those developers.
If you like them, you can hire them. If you don’t like them, nothing lost. If you hire them, you could have them build the first version and then introduce it to your developers and have your developers just take it over. Or if you’d like the developers from Toptal, you keep them forever. Or you can say, you know what, “People aren’t sending email marketing from their phones yet. We’ve learned a lot. We haven’t distracted our team. Sorry, Toptal, we’re done with this.” And go on. No loss.
All right, so if you want that idea or anything else anyone was listening to me already, probably knows by now that what they need to do is go to Toptal. Top, as in top of your head. Tal, as in talent. That’s T-O-P-T-A-L.com/mixergy. When you throw that slash mixergy at the end, you get 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no-risk trial period.
I’m actually doing all that from memory and my memory is bad, which shows you how much I’ve been talking about Toptal. toptal.com/mixergy. By the way, I was in Bali. This woman says, “I work for Toptal.” I said, great. We went over, we talked about her life. She’s living in Bali because Toptal believes people should live wherever they want. I said, “Doesn’t it drive you nuts to work late hours?” She said, “No, and I live in Bali. I’m okay with that.” Her name was Steph. Wonderful.
Rytis: It’s too hot, I guess, during the daytime. So working later, late nights . . .
Andrew: Oh, no, no. Oh, yeah, maybe that’s what it is. Maybe that’s what it is. You’re right. Maybe during the day, she doesn’t want to be stuck in an office. I would prefer to work during the day, but some people don’t care. Some people just want to go enjoy their day and then at the end of the day, sure. Do a little bit of work. A lot of work actually.
Rytis: Yeah, a lot of work.
Andrew: So tell me, what did you learn by going into somebody’s office?
Rytis: Oh yeah. So I see there as a question from Drew. So yeah, definitely I will address what did I learn? But he’s asking. So it’s about the same topic. So did I interview people who don’t like our service? For sure. That’s very important. Including those customers who have churned and who have left.
Andrew: Oh, you went to talk to people who canceled?
Rytis: Yeah. Of course, it’s very important.
Andrew: Okay. All right, yeah.
Rytis: We want to learn the reasons why did people cancel? So what was wrong with your solutions, what was wrong with your service, etc. Otherwise, you cannot improve. Nope. So it’s very important to improve the things which you are good at. But at the same time, you actually have to have to fix what’s broken. Well, because there’s something broken all the times. Well, while we are building a company, while you’re building, especially specialist startup and especially in the early days. So you know, not everything really works perfect. So talking to canceled customers, talking to those customers who left like one at NPS, it’s very, very important.
Andrew: So what’d you learn from talking to people who left one Net Promoter Score or something else?
Rytis: So usually they were dissatisfied with like certain features, like very basic things that were missing on the product. So that really helped us to prioritize development and really improve the quality of the product and then, you know, build our roadmap accordingly. So feedback coming like from existing customers as well, from churned customers as well from prospective customers. We currently, we do aggregate all of this feedback into one feedback group and it really helps to build a proper roadmap for technical development. So that’s the main thing, what you can learn.
Andrew: Do you a specific example of something that you didn’t realize you needed to change. And because you talked to someone who canceled, you changed it?
Rytis: Yeah. So let’s say some segmentation. Rules of segmentation. Yeah. So we do have segmentation in place. That’s no one, there’s a customer is canceling and the marketing vertical. I’m happy with your segmentation. Come on. We do have segmentation. So what’s wrong with segmentation? And then one specific use case, let’s say, which does not satisfy customer’s needs. And then you think about there might be a lot of customers which might be exactly the same, might have, exactly the same needs and you develop that and you know.
Andrew: So what’s the segmentation that they needed that you guys didn’t have? Because I know segmentation and targeting is one of the first features you created.
Rytis: Yeah, absolutely. But let’s say, you know, advanced segmentation, website behavioral segmentation.
Andrew: Ah, segments based on what someone’s done on the website not what they bought? Got it.
Rytis: Yeah. That is one example. Yeah. They have visited that specific category on my online store and they have not completed a purchase. So we didn’t have it at the beginning.
Andrew: Got it. I wouldn’t have thought that people actually would use that. It feels like a smart feature that no one’s going to use. But you’re saying they needed it so badly that they were willing to leave over it?
Rytis: Some of the customers, especially the larger ones. Yeah.
Andrew: Interesting.
Rytis: Yeah. For marketers, like for advanced marketers it’s very, very important. As you know, based on web behavior, you can do a lot of [jokers 00:45:54] and, you know, targeted a lot based on their behavior, your customer’s behavior on site.
Andrew: I don’t know how these fans are . . . You and I are both getting distracted by the freaking chat. I should just turn the chat off, but it’s good. So, Sohan actually went out and found the data on your site. 46.1% of people who get cart abandonment emails open them. So that half, if you send out an email to somebody who added something to their shopping cart but didn’t complete it, about half of them will open it. Then yeah, let’s look at clicks. 13.3% of them will click on this thing. And then of the people who click about a third 35% will end up buying.
Rytis: Yeah, that’s correct.
Andrew: That’s the data that he got, that’s what he found.
Rytis: Statistics, you know, as I said, we do a lot of infographics and then, you know, a lot of data. Yeah.
Andrew: But this doesn’t come from your data. This comes from Sales Cycle. This is a research company.
Rytis: No, no. It comes from us.
Andrew: It’s from you. Okay.
Rytis: Yeah. So yeah, all the infographics, etc., so we do have already a lot of customers in place and a lot of campaigns, hundreds of millions of emails being sent every month. So we do have a lot of data.
Andrew: Okay. So the first batch was, hey, let’s go to these people who are into our software and ask them to go review it. The second thing that you did was you went to these online ratings and review sites, G2 Crowd, Capterra and you went and you started asking people to review you there? Am I right?
Rytis: That’s correct.
Andrew: And again, you did the same thing when someone was interested in your software or said something nice. You’d ask them to go to Capterra and leave a review.
Rytis: That’s correct. Just keep asking. Keep asking and people do that. Yeah. And then on some of those sites you are allowed to give incentives . . . I mean you are not allowed to give incentives for good reviews, but just for reviewing. So if you are aware that a . . . self-confident about your product that the vast majority of customers really getting good experience about your product and they like the product, your service, which is very important as well, like support, etc. So of course you confidently ask for reviews and you can give incentives. Let’s say, you know, I have a $10 Amazon voucher or let’s say $30 off for next month for Omnisend services.
Andrew: So you did that. You offered people that.
Rytis: Yeah.
Andrew: All they had to do was just go review, not necessarily a good review.
Rytis: Yeah. So it depends like for, for it depends. Like for G2, for Capterra you’re allowed to do that. For Shopify, you are not allowed to give any incentives. So of course, you follow the rules of the review sites. But yeah, if they do allow you and in case of G2 and Capterra, they do incentivize on their own as well. So if you are going on their paid plan so they give you kind of 100 to 1000, I don’t remember the exact number of Amazon vouchers, which you can distribute to your existing customers.
Andrew: You have to pay them to be on their platform?
Rytis: To get premium services.
Andrew: Got it.
Rytis: It’s for free for the beginning. But if you want to get more leads, to be more visible, to get like a better profile there, so yeah, they do have a premium services there.
Andrew: That’s their business plan and then if you pay for that, they even give you stuff that you can give as an incentive to get people to come and review on their platform.
Rytis: That’s correct.
Andrew: Interesting. Okay. I’ve interviewed a few companies who do this and the whole business model is just so like, I can’t believe they could get away with it because they make money from leads, they get paid for promoting certain people. But it’s acceptable in this space. I’m not going to ask you to say anything negative or positive about it because you do business with them. I’m not going to get anything from it. What about phone calls when you talk to customers, what happened? How did that help you?
Rytis: So to better understand what are their expectations from the tool, you know, because you as a founder, you have an idea and you start building a product and you have a lot of ideas in your head and then you start delivering it and you think that, okay, come on. That’s a great thing what I’ve done. But sometimes your customers may think differently. It doesn’t mean that they don’t want things you have built but maybe in some occasions they want something a little bit different.
Andrew: Let me get more specific. Here’s the problem that I had. I was hearing a lot of people in my interviews say call up your customers. So I start to call them, my freaking people are not picking up the phone. You call, they don’t pick up. Right. So then what I did was . . . Yes, what’d you do?
Rytis: You have to schedule, you have to ask for them.
Andrew: Schedule? So I did that.
Rytis: No, not all of your customers are going to talk to you.
Andrew: There’s not an incentive for them to take the call when they schedule. So they schedule. I live by my calendar. Not everyone else does. And even if they do, they might have other things to do instead of coming and helping Andrew. So they wouldn’t do it. Here’s the one thing that helped me get people on the phone. It’s you signed up or you wanted to sign up, you wanted something, I asked someone on my team to do this. “Andrew wants you to get the results you signed up for. He will be there on a call to help you for free or he will Zoom with you to do consulting to make sure you get the result that you wanted.” So whatever it is that they’re trying to do, Andrew is going to call you to make sure you get that.
And what that means is I get to hear the problem that they came to my site with. I get to help them work through it together and that teaches me, and then I could say, by the way, I saw that you signed up on the site, did the site helped you do this? Why didn’t it help you do it? How could I help you more? But just calling them up doesn’t work. Scheduling doesn’t work. I will do consulting to make sure you get the thing that you wanted. Boom. Opened everything up. Do you have any tips like that?
Rytis: Yeah.
Andrew: Yeah, tell me.
Rytis: So yeah, we’re currently doing that a lot for our larger customers. So we do have account managers in place and once we see that the larger customer took a self-service path and onboarded and have synchronized or imported into a lot of subscribers in their [list 00:52:08]. So we do practically offer help. Help to really properly set up and properly onboard the customer. So again, currently it’s a huge source for feedback from that. So, that was not the case, back in the early days, but now it’s the second source for feedback.
Andrew: The people who are paying you more expect more service and that’s great for them, but it’s also good for you to see what they’re using, what they’re trying to do. Yeah.
Rytis: Exactly. And it is good for us to help them to benefit from on us, you know, because you want, the more they benefit the more we benefit. That’s basic, you know, because our key goal to help them to get a very positive ROI, you know, from Omnisend. Therefore we offer initial setup help.
Andrew: And Drew is saying that he incentivizes people to give Yelp reviews but Yelp doesn’t allow it. From what I understand, the Yelp, unlike other platforms, doesn’t allow any incentives. I think you’re violating the rules.
Rytis: I’m not sure about Yelp. We don’t work with them.
Andrew: What works for you now? It SEO and brand awareness? Is that the next thing for growth?
Rytis: Yeah, SEO, brand awareness and as we call it, like targeted brand awareness. So to go just and just be a very recognizable brand in a very broad audience. It’s extremely expensive and it takes a lot of time. So we do target specific as I have already mentioned that there are Shopify ecosystem, Magento ecosystem, WooCommerce ecosystem. So we do target those ecosystems with our brand awareness activities and SEO activities. And there is listings and the same review sites they do bring in leads as well and the offline activities like trade shows. And then the events.
Andrew: I saw you on Twitter with a photo at the Shopify conference? I guess you’re there. And so you guys have a booth there too?
Rytis: In Shopify conference, in this case, it’s more developers and then tech partner’s conference in southern France, there are new booths and there are no merchants and no marketers. So, but yeah, it’s good to relate, to make some cooperations with other tech partners and to do cross-promo with them to make some integrations, which is very important to bring a seamless experience for our customers.
Let’s say they have some loyalty solution in place and it’s integrating with Omnisend. And so it’s much better to them to use those two tools to synchronize the data, initiate unique triggers and some unique campaigns. Let’s say loyalty campaign when somebody buys something, you just not only send pure transactional email saying thank you for your purchase, but you say thank you for purchase and here are your loyalty points. You have earned 200 extra loyalty points. You currently loyalty points statistics is as follows. If you want to learn more, go to that loyalty solution. Yeah, so it’s good then we have attended [RSC 00:55:26] in Chicago. It’s a huge internet, retail and offline now. That was a first-year combined, combined online and offline retail in one place. It’s a huge trade show. We had a booth there, so meeting prospective customers as well as existing customers as well as agency partners, etc.
Andrew: So I’m guessing being on this podcast is part of the branding also. That’s why you’d be up past midnight. Has it been helpful to be on podcasts, to do podcasts in general?
Rytis: Yeah, I guess so. That’s very difficult to evaluate. Well, what we see that our brand awareness is really growing a lot. So that means that this is a combination of all activities you’re taking place at SEO, podcasts, recording some courses, offline activities, listings, etc. So all combined it does work. So it’s very difficult to attribute specific leads or specific, you know, increase brand awareness point, but as long as all the combination works. So we are happy to proceed with that. And of course, adding more and more on top.
Andrew: More and more top?
Rytis: Yeah, I mean, so how we do work, we find new channels, which we think that work or we have approved that works. And then usually initially it takes you more time to nail things and then you put it on autopilot and then you go after new channels, so new methods focus on requisition and brand awareness.
Andrew: That makes sense. And you have someone who does that for you now? I’m imagining you’ve started on your own.
Rytis: Yeah, that’s correct. Now we have a marketing, sales and marketing team, my seven people. Yeah.
Andrew: Oh, wow. Wait, you guys profitable?
Rytis: Yes, we are.
Andrew: All right. Drew . . . Let me close out with questions from the audience that I didn’t get to. Drew’s asking, he’s asked several times, how long does it take you to break even on a new customer?
Rytis: Around three months.
Andrew: Three months. Wow. John is saying, how do I reach him directly to talk about helping him with his brand awareness? What is a good way for him to reach you?
Rytis: Email.
Andrew: Email.
Rytis: Rytis . . . Yeah. R-Y-T- I-S@omnisend.com.
Andrew: All right.
Rytis: Or LinkedIn. I love LinkedIn as well.
Andrew: You do use LinkedIn messages, you actually accept them and respond?
Rytis: Yeah, I do. LinkedIn is my most preferred like social network. So yeah, no, it depends on the content of the message. So if I’m not interested, I’m not responding. If I interested . . . And I do communicate with people on LinkedIn. I mean, really direct.
Andrew: I think I’d just get so many solicitations. Andrew, thank you for adding me on here. And now here are 15 paragraphs explaining why you should do business with me. It’s not why I signed up.
Rytis: Yeah. I do get those as well, so I do ignore those, but yeah, as I use it for my daily deal activities. So I do need to filter.
Andrew: All right. The website for anyone who wants to go check it out is Omnisend, Omnisend.com. I want to thank two sponsors who made this interview happen. The first we’ll host your website, right? It’s called HostGator. Yeah, you can do e-commerce, you can do blog, you can do so many other things with them really inexpensively. hostgator.com/mixergy we’ll give you their lowest prices out there. The second, if you’re looking hire developer, go to toptal.com/mixergy don’t mess around. They really are the best. And if you’re not happy, they will not charge you, but don’t worry, they’ll still pay the developers because of their menches.
And finally, I’ve got to tell you this Rytis and everyone else, I am incredibly proud of what we’re doing with Mixergy Premium where I bring in entrepreneurs who are phenomenal at one thing to teach a course on that one thing. People I’ve interviewed, people who the audience admires, they come back on and they teach courses.
If you’re interested in checking this out and yes, you will be supporting Mixergy by doing it, I urge you to go and sign up for a Mixergy Premium. Go to mixergypremium.com or if you want to see a list of these courses, go to mixergy.com/courses and for everyone who’s been a part of Mixergy Premium. Thank you. We’ve got a big team here. Let’s make sure that Rytis is scheduled, that I have his cell phone number in case of an emergency, that we’ve got research on him and it’s all thanks to Mixergy Premium members who’ve been supporting for so long. So thank you, guys. Rytis, thank you so much for being here.
Rytis: Thank you, Andrew. It’s been a pleasure talking to you.
Andrew: Same here. All right, good night and bye.
