066: How Tom Kulzer Started AWeber, A Top Email Marketing Provider With Over 150k Users

Tom Kulzer AWeber

I am a huge fan of AWeber, one of the best email marketing providers around. And I can say with a straight face that AWeber is responsible for probably 90% of the income for my blog. No joke. If you aren’t doing email today, then you have to get your butt in gear.

That’s why I’m thrilled to have AWeber’s founder and CEO, Tom Kulzer, on the podcast today. You’ll learn how he founded his company and the best practices for email marketing in this day and age. Enjoy!

What You’ll Learn

  • How Tom came up with the idea of starting Aweber
  • Why the heck his service is called Aweber
  • How Tom got his first few customers
  • How Aweber became the bloggers choice for email marketing
  • The techniques Aweber uses to reduce churn
  • The challenges involved in running a SAAS business
  • Where email marketing is headed going forward
  • How email marketing has evolved over the years
  • How to improve email deliverability
  • How to improve open rates and click through rates on email
  • Tom’s take on single versus double optin

Other Resources And Books

Transcript

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You are listening to the My Wife Quit Her Job podcast, where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcasts where we bring on famous entrepreneurs simply to celebrate their success. Instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

Now if you enjoy this podcast please leave me a review on iTunes, and enter my podcast contest where I’m giving away free one on one business consults every single month. For more information, go to www.mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information, now onto the show.

Welcome to the My Wife Quit her Job podcast. We will teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here is your host Steve Chou.

Welcome to the My Wife Quit her Job podcast. Today I am thrilled to have Tom Kulzer on the show. Now if you’ve never heard of Tom, he is the founder and CEO of AWeber, the most popular email marketing provider amongst bloggers today. I personally use AWeber for my blog, my online store and my online store course, and I can confidently state that email marketing brings in probably 90% of the revenues for my blogs. Now without AWeber my blog definitely would not be where it is today, and I’m actually a huge fan of Tom and his service and I’m really ecstatic to have him on the show today.

So welcome to the show Tom. How are you doing today man?

Tom: Great, thanks for having me Steve.

Steve: I’ve always been curious actually how you got the name AWeber. What’s the back story behind that?

Tom: That’s one of my favorite stories. During kind of the beta phase and doing the development for AWeber, the service was always called the Automated Weber System. It was kind of the– you got to remember this was back in 98, and nothing like it had really existed. So we were just kind of calling it that and I was more interested in the product than necessarily coming up with a catchy name for it. And in the process I was literally sitting in the business registration office in downtown Baltimore about 10 minutes before five, before that office closed, and the process of setting up a business ID for the state in which case I needed then to be able to go off and get a tax ID for doing taxes and what not.

But the most critically it was involved in getting a merchant account. You got to have a merchant account in order to have an online business. Back in that point in time you couldn’t just go around the corner and get those sort of things. So I had to go all through all this rigmarole to get all of these set up, and I was literally sitting on the floor there going, “Automated Weber System– I can’t call a company that. That’s way too long.” We didn’t really have a domain name. I was just testing off of a random domain that I’d already had, and I was just sitting there racking my brain to come up with something short.

And I’m like, “Hey Automated Weber System– like AWeb Ass.” No, you can’t call a company AWeb Ass. That’s not good. So it became AWeber and the whole– the capitalization with the A and the W, a lot of people think that there is like a Mr. Weber somewhere.

Steve: Yeah, that’s what I thought.

Tom: There is no Mr. Weber. For me it was kind of the fact that we scooshed [ph] a couple of different words together. And frankly I think the A and the W look cooler capitalized than lower cased, and it just makes it more pronounced. So 16 years later we have AWeber, there is no Mr. Weber, there is no AWeb Ass and my parents did not disown me because I did not name a company AWeb Ass.

Steve: I probably still would have signed up even if it was AWeb Ass but…

Tom: We actually do own that domain now. We haven’t put anything there yet, but during my history classes that I teach here at the office for new team members, I always joke about that, that we need to put like a donkey or something up there.

Steve: So how did you come up with the idea of starting AWeber in the first place? What’s the back story behind that?

Tom: Sure. I was a college student at the time and I was selling wireless modems. I was like a reseller for a company that was selling wireless modems for connecting to the internet. Now this was back in late 96, early 97. And so when you say wireless modem, you don’t think like an iPhone in your pocket, think a big device that you would literally like [inaudible] [0:05:25] on the back of your laptop and connect to your laptop with a serial cable.

So no USBs, no lighting ports or anything like that, and that thing went blazing fast 92 kilo bytes per second. But at the time that was really quite remarkable and state of the art. So I was selling those on the side, going to computer shows and that sort of thing to sell this hardware and then the usage package of it. I was working with a bunch of other folks who were also reselling that, at that same product around the country. And I developed a website basically where I could put whoever sales information on the bottom of it and they could– they have their own site then to kind of represent and this little thing that I was running on the side.

And over a period of time they had these contact forms on the side where people could enquire and I saw a lot of people enquiring. And I touched base with the guys who were running those sites and it’s like, “So did you follow up with anybody? Are you making any sales, there was a lot of that. A guy– yeah, I sent an email or two where I tried to call him and they didn’t really get back to me, so I dropped them. He’s like, “No, you got to send more than like one or two messages. Just send out a whole sequence of messages. Here, I’ll send you the sequence that I am sending the people.”

And one thing led to another and I got tired of people telling me that they just– they’d only sent one or two because people didn’t respond. So I basically just automated it and I essentially created the first version of AWeber that wasn’t yet AWeber where it had sequence of seven follow up messages that went out over a period of about two months, to people that had enquired about that wireless model products. Over time the number of sales that those people started generating it increased dramatically and they were spending a whole lot less time manually following up with people.

So one thing led to the other, I ended up leaving that company that was selling the modems to focus on school. That’s kind of important.

Steve: To an Asian guy, it is very important. But go on, sorry.

Tom: A lot of those people that I was working with were like, “Hey can I get this automated follow up thing for this other company that I’m working with now?” I was like, “It doesn’t really exist,” and there was no other product on the market that existed like that where you can set up a sequence of emails to go out over a period of time. So one thing led to the other, I was busting tables at an olive garden and decided, “Hey, maybe this is a good idea to make some money on the side.”

So I figured out how to basically create a generic software to do what we do, create a log in, get a merchant account, sit in a downtown business office and get a new tax ID, all that jazz that’s involved in starting a business and making it legit there, and set that all up. Within the first couple of months we had several hundred customers and away we went. So I ended up taking a semester off from school to see where things went, and 16 years later I haven’t gone back.

Steve: Wow! So you ended not finishing school and just pursued AWeber full time.

Tom: Yep, exactly. I was a mechanical engineering major, switched to finance at the end of my first year, then I dropped out in my second year.

Steve: So are you technical guy? Are you coder?

Tom: I wrote all of the initial code. I have no formal training, I do not write code these days, but I can definitely look a code. I sit with most of our engineers on a daily basis, so it’s definitely the part of the business that is most fascinating to me is the building products and solving problems, connecting people with problems and using software to solve those problems. That’s the part that really fascinates me and keeps my interest.

Steve: So basically you kind of validate your idea early on with your other business. So you kind of knew going into this that it was going to work and you probably already had a couple of customers just at launch. Is that kind of accurate?

Tom: Yeah, absolutely. We had a thousand or two like beta testers and folks that were using the software already as I kind of developed and added on to it during the course of developing and probably the nine months or so, between the time when I said, “Hey, this is an idea I’d like to turn into something to make some money,” to the time when it kind of like launched, and it was open to general public where they could come and sign up. And it’s funny like when we– and I always say it was really friendly bunch, it was me, myself and I for a year and half or so before I hired anybody else.

But when I launched the site the very first time, it’s like I mentioned that merchant account. I didn’t actually have the merchant account approval setup, I had a secure gateway and I was able to collect credit cards, but I wasn’t able to actually process them. So it’s very much what you hear about today with the MVP product, minimally viable product. Get something out the door. I had no means of actually charging anyone at that point. So I stressed heavily to– that you could send us a check payment for your first year of service and that way it would be heavily discounted. But I also took those credit cards online.

So it wasn’t until probably about a month and a half later when I could actually charge those credit cards, where I ended up backing charge people for their first month of service. And surprising very few of the credit cards that were given at the time actually declined or were invalid in any way. So it was a nice way to be able to get out the door whereas I might I’ve otherwise had to wait another month or two for a merchant account to come through.

Steve: It’s really comforting to hear stories like this because a lot of people think when they start their businesses they have everything together right from the start. And it sounds like you just did the bare minimum to keep going, and then get the idea tested to the point where you were willing to invest a lot of money into it.

Tom: Sure, absolutely. It really comes down to– you have to get something out there because until you get something out there you have no validation in the market, and the sooner you can get it out there, the sooner you can avoid costly mistakes and time spent developing something that nobody has an interest in, and nobody is actually going to pay you for. I had people clambering right away to pay me to do this before I ever had an actual product to do it. So it was a matter of find a need in where people are looking to solve a problem there, and where they are willing to pay to solve that problem and kind of go from there.

Steve: How much did you end up investing early on into your business?

Tom: I ran my Penn State credit card right up to its limit. It was everything that we’ve done over the time. I was a college student at the time, so I didn’t have a crazy credit limit or anything. Everything that we’ve done over the years has been all organic growth. We’ve never taken any outside investment.

Steve: Awesome. So let’s talk about some of these early customers. Now how did you get the first 100 you mentioned?

Tom: Sure, I was– up to that point I was really involved in a number of online forums and discussion forums and what not about entrepreneurship. It was always like a passion of mine to learn more about that, like the whole business process just fascinated me: how you start a business, how you run a business, how you grow a business, all those sort of things. So I was involved in a number of online business forums exchanging tips and little tit bits on things that I had discovered: what worked and what didn’t work, etcetera. So when– and that was all around kind of the marketing of the wireless hardware product that I was representing then. So when I initially launched AWeber it just became– hey, I’ve got this new tool. We’ve talked about this sort of problem a number of times; I have this solution to solve it.

And it really became a word of mouth thing from there. I had an affiliate program, almost right from the start. It was really early that we had an affiliate program for having resellers and getting that word of mouth out there, but it really came down to– I solved the core problems for quite a few people. And it was just a word of mouth thing because there was nothing else out there like it at the time it really existed.

Steve: Just curious, did you actually have like a landing page and started collecting email addresses?

Tom: There was definitely an opt-in form on the homepage. At the time I wouldn’t say that it was like a landing page, specifically like you are trying to– it wasn’t like what you would call a [sweep] page or anything like that today where you had to enter an email in order to get anything further. It was here learn more, see a demo. I always kind of set it up as like a demo to see how things work and it was literally– you were being demoed on the product itself.

Steve: Yeah exactly, it’s kind of funny. So what were some of the early challenges with some of the first 100 customers? I imagine there was a lot of back and forth and debugging going on.

Tom: It was kind of a constant evolution of– of course everybody from a software product perspective, it’s always a fine line of balancing future requests with problems, and so forth that people are reporting. One of the biggest things and I think one of the biggest mistakes is have somebody come to you and say, “Hey, I want XYZ feature.” And you run off and start writing code to implement XYZ feature. I think the biggest and the most important step of all that is I don’t really care what features a customer is requesting.

I want to understand the problem that they are trying to solve with those features because a feature that a customer might suggest is not necessarily the best way to go about solving the problem, it’s just the one that they’ve thought of themselves. So I want to understand the problem so that I can understand all of the problems that are kind of about their need or system and how to best solve a bunch of those problems at the same time rather than a piece meal feature, feature, feature, feature, feature, feature kind of thing whereas eventually you end up with so many features that you solve so many different problems as– you actually solve no one’s problem because no one can figure out how to use it. So it’s a fine line, it’s a real balance to be able to…

Steve: And you were a one man show early on too with 100 customers, right?

Tom: Yeah. We had– I am trying to think. There were almost 2000 customers before I hired anybody. So yeah, it was a friendly branch. I didn’t sleep a whole lot– it’s like– folks would be like, it’s like it must be nice to be able to just like disappear from the business for a week or so kind of thing here and there. It’s like, yeah I do, but it’s like I put in my time. It’s like there were two or three years where literally like there wasn’t a whole lot of sleeping going on, let alone any hint of any sort of like day off or vacation kind of thing.

Steve: Yeah, for sure.

Tom: When you have a business like that it’s all consuming. Weekends don’t exist, night times don’t exit. And 24/7, if I wasn’t eating or sleeping the very little time that I took besides [Inaudible] [00:16:57] was anyway an active cyclist at the time. So if I wasn’t out riding and getting some exercise, I was usually planted in front of the computer working.

Steve: So I actually started blogging maybe in the end of 98 or early 99– actually sorry, 2000. And everywhere I went, everyone constantly recommended AWeber. So I am just kind of curious how you kind of built up that name share among– especially the blogging community. Like what was the process? How did you get the word out about AWeber early on?

Tom: I wish I can say that it was a more conscious effort than it actually was. I think I spent probably more time just trying to do really well by the customers that we had. Then a lot of that mindshare that you get from a market standpoint just comes from having really happy customers. You are looking at your things like MPS or net promoter scores and so forth. The more promoters that you can build around your product and around your company, the better you are going to be off. You wanted out ways with detractors and they are out there.

No matter how awesome you maybe you are always going to have detractors and over time you build that detractor base. At the same time you want to be making sure that you are building a promoter base, and hopefully those things will always be greater than any number of detractors you could have. So it’s really– do really well by your customers, always deliver a massive amount of value in comparison to whatever fee you maybe charging. It’s like there’s a– I always look at it from the standpoint, if I’m going to ask for a dollar from a customer I want to make sure I am delivering at least $100 in value to any particular customer that I am asking for that.

And then don’t be shy about asking for that either. It brings this full circle relationship where you are more than happy to help out your customers in a bend over and make that experience a really great one for each and every customer that you have.

Steve: Interesting. So your growth was primarily via word of mouth. Were you running any ads, paper click ads or any sort of search engines optimization for your site or anything along those lines?

Tom: We’ve always had our blogs. I have always– for the longest time, we never had anyone on staff that was considered as sales role. Everybody– they had a sales role from a title perspective. In my world everyone is sales whether it’s our customer solutions team, whether it’s our engineering team, whether it’s our product team or marketing team etcetera. We all do our jobs to create a remarkable experience for our customers.

We of course have PPC campaigns out there for ad words, and other sites, we have a blog for content placement and so forth. We write a lot of articles for other post blogs, we speak a lot at conferences. It’s just– one thing kind of feeds the other. The overwhelming majority of our customers come from word of mouth. Even after spending hundreds of thousands of dollars a month on advertising, the bulk of our customers still come from word of mouth, as well as our affiliate program has always done really well. And I look at that as a general extension of word of mouth. You’re not going to get somebody to personally refer to you to other people just based off of monetary incentive. You also have to be awesome, so that kind of goes along with it.

Steve: Yeah, the affiliate program is actually one of the more attractive ones in the industry, and you mentioned that you started that early on, were you getting a lot of affiliates early on in your product cycle?

Tom: Yeah absolutely it was really…

Steve: Okay.

Tom: Something where– I never really pushed the affiliate program directly. It’s always available on the site. It’s never really something that we like– we don’t place ads to try to find new affiliates. I always look at it as– excuse me. I always look at it from the perspective of, if we make a happy customer, three to four months into that customer relationship, I should introduce him to the fact that we also have this affiliate program, and not only can they continue to hopefully say good things about us to their network, but we’ll actually pay you for that as well. And it just kind of helps up the incentive for somebody to do that, and it’s really worked really well for us over the years.

Steve: And then can we talk a little bit about today. There’s just tons of email marketing providers today. So what are some of the challenges of running a SAS [ph] business among all the competition that’s available out there?

Tom: Sure. There’s always– in any good market, there’s going to be, where there’s opportunity, there’s going to be a lot of bad folks that flood in to fill that market. I think there’s a variety of ways to approach it. I always look at it– it’s funny. I actually said this to one of our product manager earlier today that at any given time in the world there’s probably ten people that have the same idea. And who is going to be successful with that idea frequently comes down to who executes on that idea and that vision first. So being able to get out there and actually execute.

There’s a million and one people that say they have a business idea, and that they want to get started with this business. And they’re making all these plans and doing this, that, and the other thing. It really comes down to like, “Okay you’ve got this idea. What the hell are you actually doing to get it out there in the world?” Because until the world actually knows about, it’s not doing anyone any good, it’s not creating any value for anybody and you’re just doing– you’re kind of wasting breath just talking about it. It’s like, “Get out there, execute and put something out there in the world.” You may need to iterate on it to make it better, but you got to get it out there in the world.

From our perspective, at this point once you kind of are in a more mature market where there’s a number of more established players that have a ground base of customers as well as kind of ground full of what the market expects in a certain product, you can’t just enter that market with something that just sends emails, you have to have a fully thought out product in order to enter it competitively, unless you have some totally different take on them. One of the biggest ways that we have really kind of differentiated ourselves over the years is kind of just what I spoke about with not having someone specifically with a sales title. We’ve always looked at marketing and sales as education.

Most small businesses these days understand that they should be doing some element of email marketing and communicating with their prospects, communicating with the customers and so forth. It comes down to how they go about doing that. And it’s that educational process that goes about doing that. And that’s why we spend so much time at conferences speaking about the subject. Why we spend so much time and energy and money frankly creating educational resources on our blogs, PDFs and so forth, and webinars, all that kind of stuff that goes along to educating people, because we can have the best tool in the world, but if people don’t know how to use and don’t know how use in their business specifically, it’s not going to do anyone any good, and they’re not going to any value out of it.

Steve: Okay.

Tom: So we’ve really approached that sales process and that differentiation process from a marketing education stand point as well as then going back to support. I don’t know if you’ve ever had the opportunity to talk with anyone here, but like you can actually call us seven days a week and get somebody live on the other end of the line to be able help, whether that’s via the phone, live chat or email, we’re here to help people and actually solve the problems that somebody might have specifically with their business, and not just with our product at large. And now we can….

Steve: Yeah, I have a couple comments on that. I’ve actually strayed from AWeber in the past, forgive me. But I’ve always come back…

Tom: Interview over. We’re done.

Steve: Yeah, I know, see you. But I’ve always come back because I just like the way the autoresponders are setup. And I like the fact that I can just get someone on the phone. There’s other competing providers that offer only email support and it’s just frustrating as hell when something goes down. So…

Tom: Sure.

Steve: Yeah that’s why I keep coming back to you guys.

Tom: Sure. Thanks a lot. I appreciate that.

Steve: Yeah. So let’s talk a little bit about just email marketing in general. So first of all where do you think email marketing is going? And how is it going to evolve going forward in the coming years?

Tom: Sure. Well, it’s– email marketing in 98 looked nothing like email marketing in 2000, looked nothing like email marketing in 2005, 2010 or 2015. It’s a constant evolution. I think the biggest things that are weighted these days is everybody talks about spam and getting to the inbox and these sort of things. Most of that comes down to individual senders and their overall reputation. And when I talk about reputation of a sender, I’m looking at things like your overall engagement with your subscribers.

So engagement can mean somebody opening a message, can mean someone clicking on a link in a message, can mean someone moving it to a folder in their Gmail or whatever other email client that they happen to be using, it can mean replying to that message, it can mean forwarding that message, anything that you’re doing to really engage with that email and interact with that email in some way that gives signals to the ISP that, “Yes I actually did want this message.”

The higher the percentage of your subscriber base that’s engaging with your messages, the higher your overall inbox delivery is going to be there. We’ve seen a continued evolution of that over the last five years or so where initially a lot of base spam filtering and what not was based on just the content of your message, and what words and such appeared in your message. And that’s really very rarely done these days. It’s more about the overall engagement of your messages and how your subscriber base is actually interacting with it.

The days of having a super large mailing list were only like a fraction of a tenth of a percent of people actually click on anything are really gone. You want be kind of holding in on those people that are most interested in what you’re doing and really kind of pruning your list, and getting rid of the people that have shown over time are none engaging with what it is that you’re sending there. So…

Steve: So let me ask you a question. Let’s say have this pretty large list and a bunch of them, they don’t open, but they don’t complain either. The fact that they’re getting the emails and not opening it, is that reducing the delivery rate that will make it in their inbox?

Tom: Over time yes, absolutely. So in much the same way like how in Google you can go and search for something, and you can type in a keyword and search for something and you’re going to see one set of results. I can go to Google and type in the exact same results or the exact same keyword and see totally different results. And that’s all based on the context of how I’ve interacted with Google over time. Gmail and other ISP providers are using the same kind of analytics and the same kind of data to be able to classify a message. So that’s why it’s often times one of those things where somebody will say like, “Well my messages are going to the spam folder.” And it’s like, “Okay. What address are they going to the spam folder on?” It’s like, “Okay.”

You’re seeing those going to a spam folder on Gmail. I can clearly see you’re getting lots of opens and clicks from Gmail and the spam folder. So the one thing that– one email going there, does not mean all of your emails are going there. And then you dig a little deeper and you go, “Oh, this is your test mailbox.” And when you get messages to this mailbox, all you do is delete them right away, or “What are you doing over time?” Overtime you’re training Gmail to know that you get this particular email from this particular sender, you delete it. That overtime is telling them– it doesn’t take a rocket scientist to kind of figure out that you probably don’t want that email.

So what are they going to do with that overtime? They’re probably going to start delivering it to your spam folder. And it makes sense that that be where you go, if all you’re looking at is the context clues of how you’re interacting with that message.

Steve: Okay.

Tom: So it’s really important to kind of think, kind of big picture about how somebody is delivering to a list. And overtime yeah. If you have somebody that’s on your list that hasn’t opened or clicked on anything, one I’d question whether or not you’re even getting to their inbox anymore because of what they have trained their particular ISP to interact with those messages. And that’s why you want be pruning that, because eventually, if you have too high of a percentage, eventually they just figure like, “Well 80% of the people that get messages from this guys just delete them right away. So we’re just going to stick the other 20% that are still getting delivered to the inbox, in the spam folder, because in all likelihood most people probably don’t want these.”

It’s a fine line and they’ve don’t publish those matrix for obvious reasons. So it’s just one of those things where you want to always make sure that you’re really holding in and targeting those people specifically that are engaging with your messages. And if people are no longer engaging with them, get rid of them because they’re not helping you in any way, and they’re not going to magically come back. And we’ve done many split tests where we segmented either our messages or our customers’ messages, where we’ve done tests on those. We segmented them off and you’ll get somebody that’s– let’s say somebody has 10,000 subscribers on their lists. And they’ll segment off like 8000 of those subscribers that haven’t clicked or opened anything in a year.

You always get the one person that– the multiple people on a blog post when you talk about this they go, “Oh well. They may not be interested now, but they’ll be interested in six months from now.” You can split them off and mail to those two different distinct segments for six or 12 months, and see like the percentage of people that actually turnaround from that 8,000 person list that was unengaged, and actually become engaged again is so infinitesimally small, it’s completely noise.

Steve: Okay.

Tom: That removing them affords you the ability to be more hyper focused on the people that are actually engaging with your campaigns. Think about the last time that you got something in your inbox and you ignored it for 12 months. Do you suddenly start reengaging with them later? Like no, you probably are annoyed 12 months later that they’re still sending you messages and they haven’t gotten the clue that you don’t like them anymore.

Steve: Yeah. That’s totally true. So do you guys do anything on your end, in terms of deliverability if you find that someone is not getting a lot of opens on their account?

Tom: Sure for every bit of repetition and engagement matrix that ISPs are doing, we also do that. It’s how we surface customers that are doing bad things from a [blinded] abuse perspective and it’s also how we surface customers that are just not following best practices and could use some additional education. So yeah, we rank in and sift and sort all of our customers based on their overall matrix and engagement that they have with their subscriber bases.

Steve: Yeah, because one thing I’ve been always curious about is, all it takes is a couple of bad seeds to kind of affect the overall deliverability of the service, right?

Tom: Sure.

Steve: Okay.

Tom: It can. When you’ve got a hundred plus thousand customers, it takes quite a few seeds but you have to be ever vigilant about those things, and making sure that they stay off your network, because it doesn’t take a whole lot to do damage in the eyes of an ISP, so you want to be hyper vigilant for that. We have really good automated processes, we have a whole reputation engine that’s, like I mentioned, it kinds of sifts and sorts our customers, and bubbles up those that are doing bad things, so that we can take action either on a manual basis or on an automated basis, which does happen.

Steve: Okay.

Tom: So…

Steve: Let’s, since you’re the expert, talk about some best practices here. How do you improve your open and click through rates typically for your emails?

Tom: That is wide open, isn’t it?

Steve: Let’s assume that people actually were interested in what you had to say at one point.

Tom: Sure. I think that– in starting at the very basic, go back to your opt in page. It comes down to are you setting expectations? So when I go to your opt in page, I should know both, what I’m getting from a content perspective, like what kind of value am I getting for signing up for this? And then how frequently are you going to send it? Because if I go to your– let’s say I go to your blog and I sign up and I say like, “I’m going to sign up for this.” And most reasonable people would expect an update maybe once a week, or maybe once a month, somewhere in that range.

But if I sign up for your mailing list and then all of a sudden I start getting like three emails a day or even an email every day, after like four, five days of that, I’ll probably going to be pretty annoyed unless you’re delivering like remarkable value in every single one of those emails. It kind of comes down to that signal to noise ratio. And in which case you haven’t really properly set my expectations for how frequently I’m going to receive that. And thus I’m much more likely to actually complain every time by not having those expectations set. Excuse me.

Steve: So let’s talk about frequency for a little bit because I know some people send once a week, some people send once a month, some people send once a day. And so are there any kind of guidelines or is it just a matter of setting expectations?

Tom: The biggest part of that is set expectations. If you want mail four, five times a day, I say that’s perfectly fine, but you better tell people upfront that you’re going to send them five times a day. And it’s so funny I have this conversation on a really regular basis with people. It’s like, “Oh I can’t figure out why I’m getting such a high complaint rate” or “why people unsubscribe after like the first four, five days.” And I’m like, “How many emails are you sending?” They’re like, “Oh we only send ten emails in the first four days.” You send ten emails on first four days? Like what are you sending?

I go to their opt in page and it’s like there’s no hint of any sort of expectations being set there, or worse yet they frequently say like, “Sign up to get monthly updates.” And I go, “Your opt in page says you’re going to send them monthly updates, and you’re sending them like five months worth of updates in the first three days. Like what’s up with that?” And they’re like, “Oh, well we haven’t got around to changing that.” It’s like, “Well people are getting around to unsubscribing, so the sooner you can get around to changing that probably the better.”

So there’s no real like– I wouldn’t say there’s a guideline to how frequently to send. I would say generally in this day and age with mobile phones and people reading things on the go, shorter is usually better when it comes to the content that you’re delivering. So if you have a lot of valuable content to deliver, delivering it in smaller bytes more frequently is probably the better way to go. Make sure that there’s– when you’re sending something out that there are some reason that you’re sending it out.

One of my– and it was funny. I was just talking about this with one of our new education marketing folks a couple of weeks ago. We had this blog post, did it probably three, four years ago where it was just pictures like some stock photo of a group of people. It was started out with like a group ten people, and then it was a group of 50 people, and a group of 100, and then 1000, and then 10,000, and then a 100,000, like what those looked like. So it was like a small concert and then a big conference, and then a giant football game or something like that, like a super bowl game where you see the size of the crowds and you estimate the capacity of an actual stadium and you put actual numbers on top of those.

You’ll hear numbers especially in the blog world of like, “Oh I have 10,000 subscribers” or “I have 50,000 subscribers, I have 100,000 subscribers or 500,000 subscribers.” The number of people that have more than even 1000 subscribers out there is so small, like as a percentage of overall businesses that are out there.

Steve: Really? Okay.

Tom: It’s kind of ridiculous that– it’s so funny too because I frequent a number of forums where people talk about how many subscribers they have. And it’s like, they’ve got AWeber accounts. I’ll just go and look and it’s like, “You just said that you had 100,000 subscribers, and I know in your account that you have 4,000 subscribers, did you”– so take…

Steve: Shoot! What did I tell you man? I forgot.

Tom: I didn’t go look but don’t, I think, don’t take people and what they’re saying as a basis. Look at your market and the number of people that are in your market. If you’re a mainstream kind of yoga studio, like how big is that market for that particular yoga studio. They might have like a 100 customers that visit them regularly, 200 on the upper hand. So they might have like 500 or 600 people on a prospect list. Those are reasonable numbers for a brick and motor business like that that’s interacting with people in the flesh.

Bloggers have a bigger sphere of influence, because they are just reaching so much, so many more people, but when you look at the overall traffic volume of a particular blog and you know you look at somebody the number of twitter followers and the number of Facebook follower that they have, you can generally get the numbers of email subscribers then tend to correlate fairly closely as a percentage overall, and so you can kind of get an idea when somebody is feeding you a line, feeding you a total line of BS there so. You know don’t take people for what they are often saying you know, you really have to look at what your actual list is and how you are engaging with it but– So we are way off on a tangent down, I forgot where we even started.

Steve: It’s okay I actually was– another question just popped into my mind just now and I was going to ask what your take was on single versus double opt in. When do you use that?

Tom: Sure, I would always use confirmed opt-in, so many people in the market often call it double opt-in, folks in the actual mailing email marketing industry and you know the ISP industry look at it as confirmed opt-in and what you basically do is you are confirming that an email address that is entered in your form has actually been the one that requested it. So you run a blog, I know you have comments on your blog, you know give me an idea just off the top of your head like how many spam comments do you get on the bottom of your blog on a daily or a weekly basis? Probably quite a few I would imagine.

Steve: Yeah, quite a few, but now so many ever since I started using different plug-ins, but yeah, it used to be out of hand completely.

Steve: So you are doing a lot to be able to get rid of a lot of that, the spam comments that are coming in through that, so looking at this from a holistic big picture perspective you put an opt-in form on a website. An opt-in form looks just like a blog comment form. It looks just like any number of forms that lots of bought spam and so forth go around the web randomly filtering out with the email addresses and names and little like the you know the names like Viagra, the names like Louis Vuitton shoes and such websites and those sort of things.

Like those boughts [ph] all they tend to submit your opt-in forms as well, and for everyone one of the invalid addresses that they ask, they attempt to add there, they also add email addresses that are owned by real people. And those real people are real people that didn’t ever hear of your website, have never requested anything from your website, and when you are not using that confirmed opt-in process those addresses then end up on your mailing list, and you start emailing them. And people make all kinds of arguments about why that is not spam but at the end to the day that’s spam.

Any email that you send that was not requested by somebody else is spam. Even in this day and age the definition of spam has really evolved over time that it’s not just email that you didn’t request, it’s email that you no longer want anymore. So somebody might have requested it at one point, but they don’t want it anymore it’s now spam in their eyes and they will usually call it that.

Steve: So here I what is funny Tom, so I recently switched to single opt-in because I found that 50% of my confirmed messages weren’t getting hit, and I found that overall the engagement didn’t really suffer and I was getting a lot more subs as a result and it turn that you guys do a really good job of filtering out some of those spam email addresses, so that’s why I asked you the question.

Tom: If you are only getting a 50% confirmed opt-in rate, we got other things to talk about so.

Steve: Okay, maybe after this podcast is over.

Tom: Typically you see anywhere from 70 to 80% of folks do a confirmed opt-in, the you know other things that you know that lead to that being lower either– a number of different things can lead to that being lower, but it could– right now, our spam detection algorithms that we look for in boughts, over 25% of all opt-in form submissions are box spam. So when you are using single opt-in the protection layer that you have there against people doing bad things or boughts doing bad things and really harming your mailing list can cause some serious issues over time.

And you may not have seen it yet, but I would really-really strongly recommend against using single opt-in, so it’s generally a really bad way to go unless that page is protected, and the only people that can possibly get to it are real people meaning like you can always after like you know shopping cart check out, or it’s after you know on a part of a landing page that you are only mailing to and it’s not generally accessible to the web from spiders and that sort of thing so.

Steve: Interesting, interesting. Yeah, maybe I’ll have you take a look at my account at some point or have someone over there look at it.

Tom: Yeah, absolutely.

Steve: But it’s been good so far and I prune every month, so practically and so yeah.

Tom: So who are you pruning?

Steve: I prune people who haven’t opened in the last couple of months who joined after certain amount of time, a certain period.

Tom: Okay, you are kind of doing it at the — yeah you are doing it at the– you are getting rid of a lot of those, but I would, you are probably still ending up with a lot of addresses on there that shouldn’t be there, but you are by far the not the norm as far as people that would prune that regular and that liberally so.

Steve: It’s because you know, I’m getting charged for them so you know.

Tom: It’s interesting because people often you know ask us about that and it’s like you know I recommend and everybody here at AWeber recommend using confirmed opt-in, and you would be hard pressed to find anybody in the email marketing industry that doesn’t recommend using confirmed opt-in. And it’s like completely cut, they always say well I don’t want to use it because it artificially limits how big my subscriber base can be, and it’s like if I was looking at this purely from a business perspective I’d say hell yeah use single opt-in and get as many subscribers on there as you possibly can, because at the end of the day you pay us based on the number of subscribers that are on the mailing list, and they are like the two things are at odds with one another.

It’s like on one hand I’m telling you to keep your mailing list to only the people that actually really want your mail, and on the other hand like you know that is artificially constraining the revenue that we could be generating from our customers overall. And it really kind of comes back you know, you can have that short term perspective of looking at the email ecosystem and saying like yeah, out of all those addressee you want, but in the long run all you need up doing is harming the overall email ecosystem and mailing to addressees that didn’t actually request it. And it just– in the long term it generally will cause more problems than it’s actually solving. So it’s just– it’s one thing that I would caution you to reconsider, and to take a bigger longer term picture of it.

Steve: So here is what is interesting Tom, I come from ecommerce world, that’s actually kind of how I started out, I didn’t even here about double opt-in till I stated blogging because most people on ecommerce, it’s all single opt-in and so that’s where I kind of got you know a little confused.

Tom: They are also getting those from topic cart check out typically where there has already been a sales transaction. Usually that is the case, we just-

Steve: It goes both ways but yeah.

Tom: Which is very different than a general like somebody happens to drive by and enter an email into a form. You know you’ve had to whip out a credit card and you’ve got, you’ve given me your address and all those sort of things, and there is business relationship and what not there. From a single opt-in, confirmed opt-in stand point that is totally different in my view, but if you’re just dumping that form on the front page of your website and asking for opt-ins or something, there should be confirmed opt-in.

Steve: Okay, cool. So Tom hey, we’ve been chatting for quite a while, and I just wanted to thank you for coming to the show. In case anyone has any questions, where can they get access to you? Do you have a twitter handle that you use or?

Tom: Sure, I’m on twitter @Tkulzer, K-U-L-Z-E-R, you can also find a whole bunch of my info on– I just have like it’s kind of embarrassing actually, but I have a personal site at Tomkulzer.com, and I’m also really hard to find here at AWeber at Tom@aweber.com, so yeah, so I’m not shy about giving up my email address and you know I only ask that if you generally have a like a question that our front line solutions team can handle, please try to ask them there first, I can’t become the sole support person for 100,000 people, so-

Steve: Absolutely.

Tom: That doesn’t work, if there is ever an issue that needs escalating you are not able to get response to you know free to drop me a line, I’m am more than happy to reply, so to get something to get an issue sorted out so we have…

Steve: And you know I use AWeber and I’ve used it for probably five years, maybe six years now. I’ve strayed, and I’ve always come back, and I think your support is top notch and whenever there is a problem I seem to always get the answer right way, and that’s why I am sticking with you guys here on out. No more straying.

Tom: Sure, I appreciate it. You know I always look at that as you know it give you context for what else is out in the market place, and I feel that is important for people to do it. You know I want folks to know what’s out there and to have tried it and to realize what the differentiators are, and you know often can’t tell that without having given them a shot. So you know I always hope that everyone comes back and that’s awesome to hear, and I really appreciate your business over the such a long period of time.

Hope to continue to earn that going forward, and I think from a business perspective that’s always really important to realize, because it’s like you know you can earn a customer, but you have to keep earning that customer every single day, so you can’t take that relationship for granted.

Steve: Absolutely, hey Tom thanks a lot for coming to the those man, it’s great talking to you.

Tom: I appreciate it, thanks for having me on Steve.

Steve: All right take care.

Hope you enjoyed that episode, I am a huge fan of AWeber, and I can say with a straight face that AWeber is responsible for probably 90% of the income from my blog no joke, and if you aren’t doing email today, then you really have to get your but in gear. For more information about this episode go to Mywifequitherjob.com/episode66.

And if you enjoyed this episode, please go to iTunes and leave me a review, because when you write me a review, it not only makes me feel proud but it helps keep my podcast up in the ranks so other people can use this information, find the show more easily and get awesome business advice from my guests. It’s also the best way to support the show. And please tell your friends because the greatest complement that you can give me is to provide a referral to someone else, either in person or to share it on the web.

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3 thoughts on “066: How Tom Kulzer Started AWeber, A Top Email Marketing Provider With Over 150k Users”

  1. Anne says:

    HA! It was so refreshing to hear that accounts with more than 1000 subscribers are the execption, not the rule… and that people fudge their numbers 🙂
    This was great, thank you Tom and Steve.

  2. Michelle Marcus says:

    Did you ever write a blog post comparing all the mailing list providers?

    I’d love to see a comparison of them all and your experiences.

    Thanks,
    Michelle

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