How Referrizer CEO Andre Cvijovic grew to $2.9M revenue and 1.2K customers in 2024.

Introduction hello everyone my guest today is andre spielbech she is building a great company called referrizer.com founder of four he's founded four marketing companies in three countries he's a born entrepreneur started making money at seven and at 14 had three income streams already his desire to help local small businesses create one of the most advanced marketing automation platforms today in refriezer.com andre ready to take us to the top absolutely it's my uh pleasure to be on your podcast i i love listening it and i wish this will be great contribution to your podcast i think if you tell me all of your revenue data i can guarantee will be a good show how much did you do last month [Laughter] that's a great transition right that was pretty smooth i think no but let's take a step let's step back though before we jump into that so you're based you're based on there in florida what's referrals are doing i mean are you playing in the marketing automation space that's right i mean the primary is we are automating a lot of things that people are doing manually or the things they they would love to do but they never do it because they hate doing it right you love referrals but it's not easy for you to say hey andrew would you like looking in your old decks and find couple people and just share them while we're talking information about my podcast my business my opportunities right yeah people don't like begging for it but they consider i want to do it so what we do is we automate that whole process and not only a referral program we ask for reviews you like to build your online reputation but even if you have a gut to ask you don't send them a link where to review them right and how to filter who you're going to ask are you going to ask everybody you're only people who are satisfied with your business like we take care of everything from reviews to loyalty to bringing them back people fall into your past cutting past the category business you want to bring it back how to do it you might not feel good about billing billing information right so did you first start building this what year uh 2012 was prior reorganizing company it was you know part of my previous business called mac marketing and the reason why we did it is i maxed out results for one of my clients and he get 27 conversion 100 hits on the website 27 people walk into his practice it was incredible so dona and under just to be clear i don't want to have ourselves you had an agency and you spun this sas coming out of the agency correct in 2012 2012 and then which one how much did the agency do in revenue in 2011 10 000 a month okay got it so not a ton about 120k now when you spun this out of the business uh did you keep 100 or do you have co-founders i did 100 okay so you currently today still own 100 business no no i own about 83 okay what happened seven someone stole 17 yes somebody stole i uh first of all i give my equity to my my team we don't call them employees their co-found co-owners so everybody in companies pay 20 with a stack stake of you know 80 cash 20 equity that's one thing and then i get some early friends and family members who invested five to ten thousand uh one guy came i asked him for 35 he offered twice 80 000. so they chipped out certain percentage of the company i see how much did you raise from friends and family total uh two hundred twenty thousand two twenty okay and that was back in 2012. no that's 2016 2016. okay for first 20 years we were Raised 100 bootstrap okay i love that now in 2016 when you raised the 220 000 what valuation did you raise that so we raised it on three million dollars and how did you come up with that we said that's validation people accepted it what was revenue in 2016 do you remember revenue i remember was still about eighty thousand a year eighty 000 a year okay so revenue the valuation was in our story of the founders it was like if you have idea and somebody else invest money it's like million dollars worth if you have a product that's running you have no revenue it's 2 million if you already have a revenue clients are paying for it it's 3 million so we're going to lock it up for 3 million before we really could justify it based on revenue metrics yep now fast forward Currently serving 1015 customers today how many customers are you working with we just passed thousands so we are about 1015 pay clients and over 13 000 free new ones 13 000 freemium okay let's dive into that for a second before we talk about your current revenue how did you move 1 000 customers from free to pay oh i didn't move them they came in as a paid one so our primary acquisition channel is the paid clients freemium is just feeder for our demo scheduler okay so last month how many new free accounts you got set up and how many demos did that generate uh interesting number exactly hundred brand new clients we generated uh about i'll tell you about thousand demos okay so last month you did a thousand demos and a hundred schedule paid 1000 demo scheduled 300 attended under the pay wow okay and how many free trial signups did you need to get a thousand demos scheduled so it's not correlated free signups are on their own uh happening from the website organic penetration so on so we have 128 free signups with 5.47 conversion out of those three signups and everything else was our brute force call center dialing out we got we are calling cold calling about 20 000 businesses every week how many people on your sales team about 20 in our call center and how many calls do they do a month or a week a week 20 000. you have wow okay how does that math work so this is this is what's kind of secret sauce of reference groups bootstrapping whole sales system is performance based 100 no base pay right no overhead the half of the setup fee that's 500 bucks goes to appointment center that sets up the demo plus we give them 10 percent of residual right then second half goes to the closer plus 10 residual so my cost to acquire client at this moment is covered on the first payment of the first month right okay and what is the residual the recurring payment after the 500 setup fee usually how much your customers pay its average was last year 179 so 17 eighteen dollars per client on the sales side and eighteen dollars for per client for uh appointment side so so customers were converting to 180 a month plan right basically 130 months okay and this year was about 200. okay and Monthly recurring revenue how much mrr did you do last month mrr i'm looking at it 174. okay yeah 174 000. and how much of that was set up fees or none of it was set up fees good question so 146 is a residual without setup fee so if you deduct 174 minus 146 i would say 26 28 000. set up fees last month and that is the key to staying basically bootstrapped as you use those setup fees to fund the growth via the commissions you pay out correct correct and that was our takeoff we went from 60 000 a year revenue to 1.4 million literally in 12 months just by implementing this model okay hold on i want to break this down so right now you're doing about 150 000 a month in revenue what were you doing just on the south side what were you doing exactly a year ago in 2020 uh about 20 less than that okay got it so call like a hundred and thirty fifteen yeah 130 and 145 was maybe uh total revenue with the setup okay what year did you implement this incentive program where you saw exponential growth 2016. oh it wasn't 20. okay so 2016 again you did 80 grand that year in revenue and you're saying you went in 27 how much revenue total in 2017. 1.1 million i see so that was your big breakout year that's right interesting so just to repeat this back to you you've got a call center with a hundred people in it 20 20 people they make 20 000 calls per week so they're each calling a thousand people per week correct if they can on average if they convert one of those a thousand callers into a paid account you they sell a 500 setup fee which they keep 50 of so 250 bucks plus they just added to their monthly income about 10 of the recurring fee of 108 per month which is what the customer pays so 18 a month there on average so you sell 10 accounts your monthly raise is of like 190 bucks so every month you're increasing your earning for 180 dollars how can somebody else listening do this they want to set up a call center of 20 people how do they do it uh three steps right you gotta be transparent to the people from get-go uh in hiring orientation do not mislead people that this is a hourly rate and then tell them this is where is it where is the call center uh all across the globe work from home oh it's it's not a physical location not physical right they need a headset internet and the screen that's it we provide them with the software we provide them with the script with objections with the process with the questions with scheduling everything with the daily trainings scripts name it second thing is uh we put ads across the nation every week we get 200 people registered for that position we do a live orientation where we get 100 people on the live called zoom listening we cover three things about the company about the job about earnings we are fully transparent we want to tell them interview me first so this is not me interviewing you this orientation where they interview us there's a bunch of questions firing and then about 40 of them out of 100 apply for the job that says we want to be there however we put a filter on it says we hire superstars only right because we we show them they can make hundred thousand dollars in a call center correlated to any other call center that can make forty thousand right even more so my good opponent setters are making sixty seventy dollars an hour compared to fifteen dollars an hour that then everybody pays an hourly basis and they come on a call they do testimonial and so on so and they provided me the detailed training on the very first day they are ready to to to jump you had twenty six thousand dollars last month in just five hundred dollar setup fees were all the setup fees generated from these 20 callers yes i mean there are any appointments and then five closers are making sales collecting credit cards so it's two-step sales process but those 20 sellers then that are in their pajamas at home they made it through your process they closed twenty six thousand dollars in setup fees for you they're keeping amongst 20 of them about 13 000 of that 50 yep okay and so ignoring the setup fees last month when you just look at the 10 you're paying out residually how much last month did you pay out to these 20 people that are part of your call center team so on the total level of the company when you do accounting and when you separate everything that goes towards the sales it's about 35 of our revenue going to sales efforts if you're growing fast it goes 40 right so yeah if it's 174 000 times 0.4 it goes about 70 thousand dollars towards sales factors yep yep so you spent about 70 000 last month to this team what you're happy to do because they're not a fixed cost for you it's all upside it's all commissioner correct interesting okay and it's very much fast the more they sell the more i paid out yeah yeah interesting tell me about the rest of the team now what's the full ignoring is 20 on the call center side what's the total team size today tough question because the the team is hiring without you need to participate in that but let's put this way 12 people in development two people in a testing a product team of five people marketing if a team of four people support team of 13 people now probably 14 and then there's the admin people that have multiple hats about three or four of them so i would say beside this sales force about 33 people want to be about it 33 full-time fixed expenses another 20 that are variable expenses they have to eat without a kill here's a catch all of those that are on a salary are outsourced okay so you're basically saying you don't you know you're not paying them seventy thousand dollars a year you get arbitrage there it's cheaper right quite interesting where they have three three three uh to one ratio so my developers are back in serbia like support team serbia boss near croatia right macedonia and so on that eastern europe part of the country what would you value your business at today oh we just raised some money and uh we valued it as nine million dollars how much did you raise uh five hundred thousand okay and why did you do that because of covet honestly covet came in um 35 revenue lost first month and i got shocked like either we fired 35 people or we lower everybody income on those salary base because they were bootstrapped we never when i paid out you know on the beginning of the month bank account is bit like five thousand dollars on it and it says this is too lean we cannot operate like this we gotta have a nasdaq let me give up some of the ownership and let something let's bring some some investors so for those reasons i wanna i wanna make sure that i don't get in the situation anymore that i have to uh go through to challenge of i mean luckily we didn't lose single click a single employee we didn't lose clients we just lost the revenue we give them free accounts until they recover uh no employee was fired everybody took the same cut nobody quit right so we stormed through the corporate like champions but i i figured out this is not a way to run the business as lean as possible so plus we want to grow i you know it's much easier when you have funds that to invest and risk and test the new new channels now we are opening four new channels i'm opening 20 people in sdr email role 20 people in linkedin uh hiring we are opening digital marketing channel that we're optimizing now that we're we are we started podcast first season is out right we have a team about that that's running and producing it so it spreads out a lot more uh for us as a there's a bigger opportunity when you can invest if someone offered you that exact valuation nine million dollars to sell the company today all cash up front would you sell no it's been why raise 500k at 9 million uh just because i didn't want to um negotiate too much the client came in honestly we sent an email to all my clients says do you wanna own piece of reference oh very cool uh sm thousand emails out interestingly five of them says i'm interested what do you have and one guy who literally 15 days before that was saying hey the business is slow can i pause my payment right and so on he came in and invested 300 pounds and he's an incredible partner a great advisor and since he is a client and advisor and a mentor we did a discount yeah and then that opens up a desire for other investors come in so another two came in with the same evaluation uh put the money in third one is is one day await with another hundred thousand so uh we've been talking on founder path about debt i should have been asking about equity will you let me put in another hundred grand at the nine million valuation i don't know would you like to invest time with me a hundred thousand i i i would look at it yes if everything you're telling me right now it checks out in your numbers i think you're building something really interesting here yeah i mean definitely i'm i'm open we are still we still didn't close that one million round and i would love to have you as a partner all right you're a latke you're a latka fan then you'd let me in i am i am all right all right all right good good we'll we'll chat more about that offline but this is this is great so okay good so this makes a lot of sense Profits now are you profitable today are you still burning cash we started burning cash as the investment came in uh as we are expanding the channels but this is like bridging the gap until the revenue kicks in yeah i mean imagine someone listening right now is calling 20 000 calls a week at some point andre's going to run out of people to call how's they keep the pipeline fresh no that's interesting there's no end to the pipeline right first of all there is famous last words come on there's gotta be an end somewhere uh you know what i was thinking the same and then i read couple books uh and i figured out there's no limit because we have canada we have australia we have uk we have world in front of us we're not even touching that so uh consider this nine out of ten phone calls are not valuable people are not answering their phone calls they're busy the the business owner is not there so consider that you only have 2 000 out of 10 000 meaningful conversations and even if you talk to them they say call me later on or call me tomorrow or maybe it's not the right moment so they almost appreciate being persistent on them and every call is recorded we have quality assurance we use it for training purposes we validate him and so on so i'm doubling up on the effort we'll be soon having 40 000 phone calls because we just launched european call center that's doing incredibly well right and we are adding email role and a linkedin role that's going to do follow-up on the phone calls as well we've talked about the variable compensation you pay your sales reps when they land a new customer that's part of your cap but when you look at your fully weighted customer acquisition Customer acquisition cost cost to get a new 180 a month customer what are you paying uh about eight to nine hundred dollars okay and so you're getting paid back there and call it seven eight nine months yeah yeah if i if i was if i was about to pay full up front that would cost me uh one demo is costing me attend a demo between eighty dollars on the email sdr roll to 130 dollars in the most expensive cost interval with us-based and ignore co ignore covet in terms of churn what does your turn look like during sort of normal or average times uh around six percent very 5.5 to 6.5 monthly monthly yeah yeah interesting 60 churn per year across the base yeah and the thing is we're very harsh on those numbers uh we calculate churn people who uh pull the money out of the money-back guarantee we have about one and a half two percent of people we offer a really strong money-back guarantee and they have seven to thirty days to call it and some companies don't count that as a sign up if they refunded within money by guarantee second one is we calculate churn multiple times on the same client comes in do the campaign pays for two months gets up comes in gets up so four times they're affecting my churn you know some companies don't count that as a churn so we really want to get a clear clear picture about what the churn is by having the worst case scenario on the turn however i i am aware that this can be improved so we did we created a team churn team called zero churn uh we have a person who's consistently monitoring the whole customer journey and why they're turning documenting those processes and have an off-boarding process where we have a one-on-one conversation with every person analyzing really what happens so there's no client left behind plus one of our strongest smartest engineers is taking on data science now specifically focusing on return so we'll have a predictive turn and analyzing account health status and really seeing where the churn is coming from so uh i believe within a year and a half will be down to three percent you're thinking about the right stuff andre let's wrap up here with the famous five number one favorite business book woo oh man uh favorite business books is ultimate sales machine by checkpoints i read it nine times i recommend everybody number two is their ceo you're following or studying i like dan martell a lot and i'm i'm a big fan of him and an elon mask as well because i read his books and biographies and his challenges dragoons number three what's your favorite online tool for building roof riser jira all right number four how many hours you sleep to eat every night sorry say that again how many hours of sleep to get every night eight hours no compensation with that and what's your situation married single kids married with the kid one year how old are you i'm 38 now 38 last question what's something you wish you knew when you were 20 whoa you kind of don't have any regrets or knowledges um that's a tough one maybe something you tell your 16 year old if i can do all over again i would do the same way man i i don't know it's not about a regret it's just something you wish you knew when you were 20. i should come to us earlier okay and where are you now you're in florida i was in a living in serbia when i was 20. so maybe that would be one thing that i would speed it up guys there you have it refriezer.com launched in 2012 and 2016 are doing 80 000 a year in revenue ballooned in 12 months to 1.1 million in terms of ar in 2017 now doing about 1.7 million a year in revenue or about 150 000 a month in pure sas but a lot of other cash flow coming from setup fees over a thousand customers depending on average 180 bucks per month he's moved his entire sales organization into a variable cost you're going to enjoy that in the episode burning a little cash today as they raised 500 thousand dollars last year during covert at a 9 million valuation 33 folks on the team 14 engineers sales team over 20 people dialing 20 000 numbers per week as their main channel andre thanks for taking us to the top appreciate you looking forward to listening this episode again and sharing it with other fox thanks andre one more thing before you go we have a brand new show every thursday at 1 pm central it's called shark tank for sas we call it deal or bust one founder comes on three hungry buyers they try and do a deal live and the founder shares back end dashboards their expenses their revenue arpu cac ltv you name it they share it and the buyers try and make a deal live it is fun to watch every thursday 1 pm central additionally remember these recorded founder interviews go live we release them here on youtube every day at 2pm central to make sure you don't miss any of that make sure you click the subscribe button below here on youtube the big red button and then click the little bell notification to make sure you get notifications when we do go live i wouldn't want you to miss breaking news in the sas world whether it's an acquisition a big fundraise a big sale a big profitability statement or something else i don't want you to miss it additionally if you want to take this conversation deeper and further we have by far the largest private slack community for b2b sas founders you want to get in there we've probably talked about your tool if you're running a company or your firm if you're investing you can go in there and quickly search and see what people are saying sign up for that at nathan laca.com forward slash slack in the meantime i'm hanging out with you here on youtube i'll be in the comments for the next 30 minutes feel free to let me know what you thought about this episode if you enjoyed it click the thumbs up we get a lot of haters that are mad at how aggressive i am on these shows but i do it so that we can all learn we have to counter those people we got to push them away click the thumbs up below to counter them and know that i appreciate your guys's support all right i'll be in the comments see ya