How Clickfunnels Built Their Way To $100M ARR | Ep. #710

Welcome to another episode of Marketing School. I'm Eric Siu.

And I'm Neil Patel.

And today we're going to talk about how ClickFunnels built their way to $100 million ARR or annual recurring revenue. But first, before we jump into it, I'm going to talk about what ClickFunnels actually is. So ClickFunnels is a— we could call it a SaaS product, software as a service product. You pay monthly subscriptions. I think it starts at $95 or so. And then from there, you are able to build landing pages. You're built— you're able to build One-click upsells. They just have a bunch of different options. You can actually, you know, I think they have an email service provider actually built into it as well, where their kind of pitch is that you can build everything you need. You can fire your web designers, web developers, everything, and just have this, this kind of, you know, we can call it a bundle too. You can have everything built in one spot, or you can call it a, not a workplace. I can't, I'm struggling to come up with a word right now, but you have it all in one. Okay. And their competitors are You have LeadPages, which is funded, I think, about $27 million.

More probably by now.

Infusionsoft, I think, was $127 or so.

Yeah.

Those are their 2 direct competitors. And he's very— Russell Brunson, the CEO, is very kind of public about saying these guys were our 2 targets. Now they're kind of in the rearview mirror, but it's just helpful to give you that context around ClickFunnels. And they built up to $100 million ARR, annual recurring revenue. Again, I think it's over a 3, 4-year span. And they didn't raise any venture financing at all.

Where'd you get the $100 million number from?

He says it all the time.

Oh, good for him. Yeah, I met him in person. He's really smart. And the only reason I was asking Eric was the last time I heard the numbers was on Nathan Latka's podcast, and I think they were at $60 million, but that means—

2 years ago, I think.

That was December. No? No?

He says it all the time now, $100 million. I don't know.

Good for them. And I believe it. And the reason I believe it is The product is sticky. Once you set up a funnel, it ends up working. The one thing that they did super, super well, they actually did many things super well, is they created a product that has real usage. Like if you stop using it, you make less money. You use it and you do it right, you make more money. And not only does he sell the product, but he also sells training that goes along with it. In many cases, he gives the training away for free. To ensure that you're using the product right. Because they know that, hey, if you get in there and use it right for the upsells and the downsells, you won't just stick around for a year or 2 or a few months. You'll stick around and be a lifelong customer.

Yeah. So, interestingly enough, I'm not sure if we mentioned this on this podcast, but a couple of weeks ago I was at a dinner and I was talking to this guy and we started talking about marketing and all of a sudden we started talking about funnels. And then like we just kept talking more and more. And then this guy, like, I was like, so, so we introduced each other finally. So what's your name? He's like, oh, my name's, you know, my name's so-and-so. And he's like, oh yeah, I'm one of the co-founders of ClickFunnels. I was like, oh, okay, that's why we're talking about funnels. And then we just started talking more and more. He's like, well, you know, the one thing that really worked out for us because Russell is such a good salesman is they bundled everything. So, we talked about bundling a couple episodes ago.

Yeah.

He's just like, dude, like, if you watch, if you Google Grant Cardone Russell Brunson 10X, you are going to see Russell Brunson sell on stage just for an hour and a half, the presentation, and he closed $3 million Of ClickFunnels, the bundle, he basically caused a buying frenzy and got everyone to start buying, right? My point is, the way that bundle was set up was, okay, look, we're going to— to Neil's point, we're going to eliminate everything, we're going to put all in one, and then we're going to help you make more money. You take it away, you know, it's all gone. But we're going to teach you how to build funnels. We're going to give you funnel scripts. We're going to show you how to get more traffic as well. We're going to give you this, we're going to give you that. We're going to give you an enterprise version of ClickFunnels. We're going to give you that, we're going to give you that. So all this stuff, all this value. And by the way, we're going to give you ClickFunnels for free for an entire year. I'm going to give you all this other stuff, right? Basically, it became such a no-brainer that to pay $3,000 for all that seemed like— look, there's like a 30-day money-back guarantee too or something. You would be almost foolish to not take that deal. And when I spoke to the guy, the guy Dylan, he was just like, yeah, man, everything was all because of the bundle. It's all about bundling. All what Russell Brunson does was— is he might have the same kind of general funnel, But he'll switch up the bundling at the top from time to time just to keep the offer fresh.

The other thing that they do is a ton of webinars. It's a great strategy. They'll throw on a webinar, they'll educate for 30, 40 minutes, then they get into a pitch on ClickFunnels, and then they give you, again, as Eric mentioned, a bundle on— and with a discount on why you should buy ClickFunnels. And then of course it renews, assuming you keep using it. What's cool is not only did they create the webinar and then drive Facebook ads, They also started doing things where they reached out to everyone in their space and tried to get them to promote ClickFunnels and give them a commission, right? They're using affiliate marketing to grow as well. So they're doing ads, they're doing content marketing, and they're doing something that a lot of people know about but they neglect, which is affiliate marketing. Everyone looks at affiliates as like spammy and scammy, and sure, a lot are, but there's a lot of legitimate ones out there. It's just another word for like a business partnership or business development deal.

Yeah, Neil, I think their affiliate deal, they give 40% commission.

I have no idea. It's like 40% or 50%. It's something drastic. It's—

that's the thing. Like, they stand out from the rest out there. They're very generous with their commissions. And that's what's going to cause you to stand out. You know, giving a no-brainer deal, which is the bundle, and also really taking care of your affiliates or your performance marketers. That's how you stand out from the rest. It's not only that your product's really good. Your offer is really good and also you're treating your affiliates really well. So a win-win-win across the board. And that's how they got to $100 million ARR.

Yeah. And the other thing that they've done extremely well is they keep doing little marketing experiments and we get to that in a few episodes from now. And here's an example of one experiment that I learned from Russell Brunson. Again, I believe they've done an amazing job, not just on the marketing, but the product as well. Love the guys to death. Is when you check out, they have like a little checkout bump where it just has a tick box being like, for this X one-time fee, you get A, B, and C included. And it's marked off like 70, 80%. It just causes a lot more people to take that upsell. There's no real cost. You don't have to go into ex— you know, like crazy in-depth review or video or pitch just to get people to take it. Like, It's like a 2-sentence offering and it's so cheap and so affordable for what you're getting. Everyone's like, okay, sounds good. It doesn't decrease conversions. They're getting more revenue per user. That's something that I learned from Russell that all of you guys should consider implementing within your checkout pages. And if you haven't, check out ClickFunnels as well.

Yeah. And Neil and I have talked about this, probably the last time we talked about this was maybe 6 to 12 months ago, but if you go to marketinginyourcar.com, you're going to see that Look, Russell's always coming up with different offers and this offer was just around the MP3 stick. And this is where basically, I'm not going to go too much into it, but he was driving Facebook traffic, getting a $15 CPA or cost per acquisition, and he was actually making $32 on that. And that was just on the front end without people buying, you know, in the back end of his email list, which is where he really makes his money with, you know, his $25,000 mastermind and all these different things. So he's being really creative. I mean, he's a guy to certainly follow. Check him out. You know, we respect his marketing. And think of it this way, this one company that doesn't really have salespeople, that just relies on webinars, they out-marketed the Infusionsofts of the world, the other companies out there. And just think about it. I mean, what Infusionsoft— you probably have a better idea than I do, but when you raise $127 million, I mean, you have to grow into a valuation of— we're talking $500, $600 million at least.

No, because you're raising the money in tranches. So, every time you're getting diluted.

So what do you think Infusionsoft is valued at now?

It depends what their last round was. So let's look it up. Infusionsoft Crunchbase. I can tell you. I can give you a rough idea. If I had PitchBook access, I have an account, but I don't have the login with me here. So their Series D is $55 million. You can assume that people lose typically 20 to 30% per round. So their valuation is somewhere around $200 million.

$200 million. I think they're actually transparent about the revenue they were doing.

Yeah, but it's also growth and profitability as well. Right. So if you have a ton of revenue and you don't have crazy growth and you don't have a ton of profitability, you're not worth much.

That's my point. That's my point. Like having to grow into that, when you raise that much money, you have to, you have, you have investors and evaluation that you need to meet up to. A lot more pressure goes on you and that can kind of screw up how you decide to move in terms of sales and your marketing trajectory. So anyway, that is it for today. And by the way, before we go, Neil and I are actually talking about bundling cool tools together, you know, some of our favorite marketing tools, not just ours, but other companies. If you can reach out to me, just tweet at me @EricoSiu, so E-R-I-C-O as in orange, S as in trigger, I-U, just saying, yes, I would love a bundle as a different offer. We're thinking about giving a new offer to you guys just to take care of you guys a little more. Awesome. And before you go, our current offer right now is check out our marketing goodies at singlegrain.com/giveaway to grow your business. And we'll see you tomorrow.