How Wpbuffs CEO Nick Adams grew Wpbuffs to $1.2M revenue and 500 customers in 2020.

hello everyone my guest today is joe howard he's building a very cool business called wpbuffs.com uh he's also co-host at the wp mrr wordpress podcast which you should all check out joe you're ready to take us to the top yes sir thanks for having me it's gonna be fun you bet so you described wp buffs on indie hackers as 24 7 wordpress site management now is this consulting or sas uh it's not really consulting it's not really sass it's more like i i put it under the category productized service so we're really a services company at core uh we're managing wordpress websites for entrepreneurs small businesses but also for agencies and freelancers we have a white label program as well we do white label support but it's kind of more productive service or pretty much packaging uh services together uh and selling that uh to folks who need ongoing support when it comes to wordpress what can you be specific so i have a wordpress blog what's something i would pay you to do with that wordpress blog yeah cool uh a lot of people people need all sorts of help with wordpress people use wordpress they build the site they install everything they get the theme set up they get all the content on the images and then they realize oh goodness there's so much ongoing stuff i have to do i gotta manage all the updates for the plugins i gotta manage backups uh how do what happens if the website goes out on a on a friday night uh and i'm like out for the weekend what happens to the website then um there's a speed of the website which also of course like influences like you're doing like seo and other marketing stuff you want to use experience to be good security for the website uh making adjustments on wordpress all these things are they're easy for someone who really knows wordpress but if you're a business owner and you you know nathan want to run your blog instead of worrying about oh where do i edit this wordpress thing then that would be something you could grab a subscription for and our team would just help you out with our you know website edit speed and security optimization all that stuff and let's not bury the lead here you've talked about this what have you grown revenue to and then let's get the backstory yeah uh revenue right now uh it's every month it's like a little bit up or a little bit down but we're around 90 to 100 k monthly recurring revenue right now so like just over a million dollars annual revenue for the business um and that's through again direct customers website owners small businesses paying us to manage our website then also a larger agency and freelancer partner is paying for white label kind of reseller 24 7 support so a couple questions there what's the average customer paying you per month of the hundred grand a month yeah lifetime value also actually differs significantly based on if you're a direct customer if you're a white label partner are direct customers most have one site but a good amount probably 20 or 30 percent of those direct customers have two sites three sites five sites those can add to lifetime value uh of those customers anywhere from like 1500 to 2 000 usually that lifetime value white label partners are a little bigger they're coming on with more sites they're making 24 7 support a core piece of their business and so they're really scaling reselling of our care plans um so their lifetime value can go anywhere from four thousand five thousand six thousand seven thousand i mean i think probably our longest serving customers who have been with us for you know five six years they're they're up there around five six thousand dollars um i think our average customer stays with us for about 29 months last time i checked lifetime value um so yeah people tend to stick around so five six years is your longest customers that mean you launched the company about 2014 2015 yeah 2015 uh like beginning of 2015. uh so and yeah and how many customers are you working with today oh good question um probably a number of customers is different than a number of websites managed so probably number of customers are probably around like 500 uh and how many websites websites we're probably approaching about a thousand websites right now uh maybe you've reached that i don't know and and of the 1k customers are sorry the 500 customers how many of them are direct versus white label partners the majority of our business is white label websites managed under the white label program probably about 70 percent of the website 60 to 70 of the websites we manage are white label support meaning an agency works with us and resells our care plan to their clients we manage that client's website do all the speed security optimization website edits updates backups we do all that under that white label agency kind of partner we send emails out on their behalf and do email support on their behalf we send out reports with their logo on it that kind of stuff um so yeah 60 to 70 white label and the rest direct customer so this white label model is an interesting one i want to dive deeper on it for a second so so if someone is going to sign up direct to you on your website what would they pay you per month to help like for you to manage two of their sites let's say they have two websites yeah we have different tiered plans so folks can pick and choose what plan they go under we have certain requirements like um websites with advanced functionality like e-commerce on the site or like membership sites that's kind of advanced functionality we put that under our perform plan it's 197 a month for that care plan for that description uh if someone has a custom built website uh like custom plugins they're going on you know custom plan pro which is like 500 a month so to have a custom website it's going to be more expensive because our team is relied on to manage all that code we don't have a theme developer plug-in developers to help update the plugins we manage all of the all the pure code on those websites but people can pick and choose what they want on different sites if someone just needs they just like don't want to deal with like pressing the update button on a like simple site for the most complex things you know contact form then that can go under our maintain plan sixty seven dollars a month um so two per form plans two websites under perform plans about 400 a month uh but if someone say one website they really want to optimize speed of the site but one website's a little less uh important and maybe they just need to maintain plan you can mix and match and go you know anywhere from i don't know 150 for two sites up to you know a thousand or two thousand dollars a month per for two sites really depends on functionality it depends on what people need on the site uh what kind of management people need do they need all the nuts and bolts and uh all the all the goodies or do they just need something simple if you're doing a straight average right if you're doing a hundred thousand dollars a month right now in revenue across 500 customers you know obviously 200 bucks a month is about average which kind of coincides with your 197 a month plan um talk talk talk to me though so let's take that 197 a month plan that's what it is direct if you sold that through a white label partner what would they sell that usually to their customers for like what markup do they build in yeah we give all of our white label partners 20 discount on all of our care plans so it actually allows them to have a better profit margin on all the plans they resell um so it allows us to manage more websites uh in a model that's still solid for us and also allows our white label partners to uh make a little bit more profit on each care plan they resell and it's good great for our end customers as well because they get great support we've systemized everything we do a great job what we do so what will they sell that for though joe so if you're giving them your 200 a month plan for 160 a month so there's 40 a month of margin built in but they do they mark that up even more higher than 200 a month yeah folks can mark it up if they want to um a lot of it's going to depend right on their relationship with their customers uh some people have great relationships and some people sell that for our perform plan you know for let's say 300 a month we usually recommend people start selling the uh care plans at our direct customer base rate so if someone gets 20 off 197 dollars a month about 157 a month they're paying us for that white label care plan we recommend they start uh by selling that care plan for 197 dollars so it's about 500 a year in profit for that care plan if you sell it at that rate but we also say once you've done that for a little while you can always adjust pricing moving forward if you feel like you have good relationships you can always increase pricing a little bit if you want to that's fine too what prevents a white label partner coming in and undercutting your own website's pricing this is the biggest issue that i talk to when people have this kind of value-added reseller go to market strategy yeah we vet all of our white label partners very carefully anybody who wants to sign up for a white label program has to jump on a call with us part of that is yes to sell the white label program and we want to educate people and make sure that you know what we're doing is going to fit well into their business model but it's also really focused on making sure that those partners are people who want to really uh add care plan reselling to their...