Work Hero Update: How We Adjusted Our Pricing Model And 5x'd Revenue

Kevin Koskella

•

Published: February 23rd, 2022

save

Kevin Koskella

Founder, Work Hero

$12.2K

revenue/mo

Founders

Employees

Work Hero

useworkhero.com

from Austin, Texas, USA

started August 2018

$12,200

revenue/mo

Founders

Employees

Discover what tools Kevin recommends to grow your business!

Discover what books Kevin recommends to grow your business!

📗

Want more updates on Work Hero? Check out these stories:

1. How I Started A $1.4K/Month WordPress Support Service (2020) ➜

2. Work Hero Update: We Just Crossed $10K MRR (2022) ➜

This is a follow up story for Work Hero. If you're interested in reading how they got started, published almost 4 years ago, check it out here.

Hello again! Remind us who you are and what business you started.

Hi! I’m Kevin, from California, USA, and currently in Austin, Texas.

In 2018, after years of hiring admins, developers, and designers, I started Work Hero, A WordPress support and maintenance service focused on helping small to medium-sized digital agencies and digital businesses to thrive online. We help them with supporting their websites by building pages, optimizing site speed & security, adding features, and anything else that may need to be done with a WordPress site.

All plans include:

Weekly reports
Daily scans
Off-site backups
Speed optimization
Mobile optimization
Security optimization
24/7 uptime monitor

Our pricing plans are here.

We provide support for businesses run on WordPress websites, that have many moving parts and tasks to be done, and need a team to handle them.

Our customers now consist mainly of digital agencies, eCommerce, and membership websites.

A little about our history:

We started as a WordPress + Design agency. We barely broke even with this model, and we’re ready to give up in the Fall of 2019. But then we decided to minimize and drop our design offer altogether, focus on WordPress development, and lower our prices significantly.

We landed 1 customer in December that year. In January, we picked up 2 more. In February we got 2 more. In March we added 3.

One year ago, when we were first interviewed by Starter Story, we had 9 customers making us about $1400/month.

Now, a year later, after many changes and pricing updates, we have 34 monthly paying subscribers and revenue is up to $8100/month.

Our team is still small, but more diverse now. We hired a developer in Argentina to expand time zone coverage and moved two developers full-time. We are trying another Eastern European developer out to have full coverage around the world.

Tell us about what you’ve been up to! Has the business been growing?

We have grown from $1450 a month in revenue to $8100. We have gone from 9 paying subscribers to 34.

When things get tough, focus on the reasons you are running this business. What can you get super passionate about, even when challenges are mounting?

We are still growing mostly from referrals- both from customers and business networks. But we also went deep into social media cold outreach campaigns, which have been our #2 sources of customers. We were running campaigns on both Facebook and LinkedIn, as well as email follow-ups.

Recently, in the past two months, we have started doing Google Ads.

We have changed our pricing quite a bit in the past year. What we were finding is that our agency customers often had many websites, but only 20% of them had a lot of support work (80/20 rule!), and we were previously charging $50 extra per website. So we changed our pricing to offer based on the number of hours vs the number of sites. Agencies can now add multiple sites to be maintained but only pay for the support hours they use.

The new pricing seems to have worked out better for everyone, and we still have a low cost ($79/month) offer for non-agencies who need a few things done every month and want the backups, uptime monitoring, etc. that we include with maintenance.

Google Ads have been interesting. It has taken us a while to get our footing (we started two months ago), but leads are starting to come in. We have been working with a consultant and there is a lot to do, but I can see it paying off now, as we’ve so far landed two paying subscribers, with a few more leads in the works.

I hired a business coach for a 3-month stint, which was super helpful. He guided me to understand the numbers of our business a little better and to have a better grasp of how easy it is to achieve our goals.

What stopped working earlier this year was messaging members of Facebook groups. It was already a numbers game with low odds of getting replies, but it started to become a burden- lots of messages wasting my time, so few quality leads, that I stopped doing it.

We experimented with a growth marketing consultant, who gave us some creative ways to find leads via cold emails (warmed up cold emails!) and using a combination of LinkedIn and We-connect.com to hit up targeted lists. It’s still a work in progress, with potential at a very low cost.

What have been your biggest lessons learned in the last year?

The biggest mistake I have made- and I’m just learning this- is giving up too soon on leads. We may get a question that comes in from a random source, and I will answer it quickly, maybe follow up 1 time, and let it go if I don’t hear anything. Often, people get distracted and just need a reminder.

Next, to this point, we haven’t been collecting email addresses or had an email funnel set up. But we are finally getting there and adding that this week, so when our paid traffic comes to our site, we can at least capture their email. Our first offer will be a coupon code to get a couple of free weeks with us.

We have two significant challenges, one is ongoing, and the other is current.

The ongoing one is, balancing the number of developers we have with the amount of work/support tasks being requested. What has worked pretty well here is giving out part-time developers more hours when work increases, instead of hiring new ones. But sometimes when we hire a new developer during a busy time, the busy time subsides as soon as they get onboarded! So this challenge is getting better, slowly, but the kinks still need working out.

The current challenge is deciding when to bring on operations help. We have systems and SOPs to keep things running fairly smoothly, but both my partner and I (especially my partner) are still too involved in the day-to-day operations part of the business. I have been investigating what I need to do to find a part-time ops person, but pulling the trigger on paying for this is a tricky thing, as it seems we still need a few more paid subscribers to justify the cost here.

Some of the good decisions we made over the last year are, keeping the marketing budget low, working closely with our contract workers to make sure they’re happy, giving raises, and increasing hours where it makes sense. Additionally, we have been able to improve processes and decrease our response time by giving our VA more responsibilities, which has allowed her to have more impact on the company’s growth. For example, she has been instrumental in implementing our cancelation policy, which is when a customer asks to cancel, they get a series of emails from her detailing what they will be missing out on by canceling, and offering a downgrade as an option.

There’s also something to be said about keeping optimistic. My partner is very good at this and it boosts my enthusiasm to “keep going” even when we get cancelations (we had 2 in a row recently!) This is where partnerships can be super helpful- it’s very difficult to run a business as a sole owner when the downturns can wreck your resilience.

What’s in the plans for the upcoming year, and the next 5 years?

We set a goal to get to $20k a month in review by the end of September (back in March). We are not quite on track for that, but I think there is a chance, as we have been adding more to our marketing budget and have a team that’s ready to handle the growth.

We have recently experimented with shifting our target audience slightly, from small digital agencies to WooCommerce companies (or WooCommerce agencies). We plan on finding other niches that can use our services.

In the short term, I believe we will make it to 10k a month very soon.

The plans to get there include our email opt-in, improving Google Ads, continuing running cold email campaigns, and forming more partnerships that align with what we’re doing.

We’re also going to be dabbling with AI- in terms of content marketing and funnels. This is probably a few months off, but it’s a necessary component to keep up in online marketing.

Long term we are just interested in automating as much as possible, through SOPs, VAs, AI, and operations help as I mentioned.

I’m writing a book about freedom, and want to carve out more time for that so I can launch in November!

Have you read any good books in the last year?

A classic I re-listened to last year: The Magic of Thinking Big, by David Schwartz. I also spent some time learning about Internal Family Systems- a kind of therapy that can get you in touch with various parts of yourself, and help you to make better decisions and live more peacefully.

The only business podcast I listen to is Tropical MBA, which focuses a lot on lifestyle businesses and digital nomad issues.

For sanity around all the COVID madness, I’m a regular listener of Adam Curry’s No Agenda podcast, which filters the news and tries to not have a political agenda.

Advice for other entrepreneurs who might be struggling to grow their business?

It’s SO important to look at the longer time horizon, instead of judging everything in just 1 month. Keep track of all the numbers but the key is just growth, not massive or exponential growth- those things happen but they are rare, remember- most businesses fail, and the ones you hear about that are “overnight successes” or “going from 0 to 6 figures a month in a year” are SUPER rare, no need to get discouraged by any of that.

And, you have to like what you are doing. If you’re not excited, you will fade and the business will suffer. When things get tough, focus on the reasons you are running this business. What can you get super passionate about, even when challenges are mounting?

Are you looking to hire for certain positions right now?

We are looking for a part-time operations manager to help us improve our processes, make smart changes and hires, and free up our time a little more.

Where can we go to learn more?

If you have any questions or comments, drop a comment below!