”The only way I know to accelerate progress is through learning from others.”
– David Cancel, CEO of Drift
Growing a SaaS company is hard.
And for marketers who are driving that growth on the frontline, it’s challenging to deliver results in an increasingly consolidated SaaS landscape whilst managing the balance between strategic planning, tactical operations and a wave of new skills and technologies to master.
So any form of help is most welcome, and one of the best sources is through learning from others.
Since launching The Growth Hub Podcast, I’ve had the pleasure of interviewing some of the top marketing experts in SaaS from companies such as Slack, Trello and Drift to go behind the scenes and discover the successes, challenges and lessons of their growth. I’ve learned so much along the way and I wanted to take this opportunity to share some of the most important lessons on what it really takes to grow a successful SaaS company.
You’ve probably heard the term “growth loop” thrown around, but what does it actually mean? For Pedro Magriço, Head of Product Growth at Typeform, he defines it as a set of inputs and outputs that repeat themselves indefinitely.
There are different types of growth loops, the challenge you have is to understand which growth loop(s) you can benefit from.
For example, a very basic growth loop would be the paid loop, which is where you use paid acquisition to drive traffic to your website and aim to convert it as cost-effectively as possible into sales. If the lifetime value of each customer is greater than the cost of acquisition (LTV > CAC), then you have found one sustainable growth loop. Others include SEO to Content, a Marketplace, or a Viral Loop.
For Pedro and the Typeform team, they realized their product, data collection via forms and surveys, is viral by nature; you create one and send it to 100 people, exposing your product and brand to that group. Five out of those 100 people might decide to create their own Typeform, and they send it on to another 100 people each. Then 25 out of those 500 will create their own – and so the loop continues.
This an example of a Viral Loop (or what some refer to as product led growth), and for Typeform they took advantage of this with the addition of one small button in the bottom corner of their product that read “Powered by Typeform”. Pedro and the team experimented with copy and the landing pages you were directed to after clicking the button, which had a huge impact on their growth numbers.
As a marketer, you can also leverage multiple growth loops simultaneously, but the challenge is to find those that work for you. You’ll then understand that increasing your inputs by X will increase your outputs by Y.
As Pedro says, finding and scaling new loops is what brings 10X growth!
When we talk about growth, discussion often tends towards scalability and uncovering those tactics that will generate hockey-stick curves. This means you might also hear marketing, growth and product teams say, “But that’s not scalable.”
Hiten Shah is one of the most successful names in SaaS and has a solid track record when it comes to building products that stick – he’s also the founder of KISSMetrics, Crazy Egg and Quick Sprout. And he also evangelizes growth strategies that don’t scale, like spending time talking to your actual customers.
When we first used Draftsend it was a few weeks after the product had launched, and a couple of weeks later my colleague and I found ourselves having a 30 minute Zoom call with Hiten and his Co-founder Marie Prokopets about our experiences of using the product. They asked why we wanted to use the product, what parts of the experience were the most challenging, and shared plans for the future.
Taking the time to speak with your new users is difficult to scale up, but then again, customer-centricity is not something you value, it’s something you do.
Guillaume Cabane, aka G, is known as the mad scientist of silicon valley.
That’s because he experiments and has a reputation for pushing the barriers of what can be done when it comes to growth marketing.
And one big source of inspiration came from sales when G tried to replicate what sales teams were doing well compared to marketers.
He realized that the best salespeople listen, understand the key pain points and problems, and then adapt their approach for the unique needs of each prospect. In marketing, on the other hand, we push the same message to everyone in the hope that it resonates with a few, who will eventually go on to become a customer.
This is what G calls the “Spray & Pray” approach, since if you convert at 3%, that means for every three customers you get you annoy 97 other people. So he went about personalizing marketing at each stage of the funnel.
Back when G was working at Segment as their VP of Growth, he stumbled upon a paper about the psychological effects of hot drinks upon buying behavior. In short, if you’re making a purchase decision, the addition of a hot drink will make you more inclined to buy (so the next time you go to buy a car, make sure you take some ice cold water with you).
Taking this thinking to a marketing field, G thought it would be cool if he could deliver a hot cup of tea or coffee to his best leads while they were browsing the website. So he used Drift to qualify if their top prospects would like a hot drink, and once they’d selected their preference it would trigger a notification to Postmates that would deliver it directly to the person’s office within 15 minutes.
Now you see why he’s called the mad scientist.
What makes G stand out is his original thinking and questioning of the commonly accepted practices in modern day marketing. With an overwhelming amount of technologies out there, the marketers that will win are those who get close to the customer and align the way they market and sell to the way the customer wants to buy.
There is no limit to what can be done when it comes to marketing, all you need is curiosity, a bit of craziness, and a little bit of coffee.
Data is everywhere. It’s in your CRM, your marketing automation platform, and all the others tools that are part of your stack. We can be smarter with data by centralizing it to form a single source of truth, which is precisely what the Hull platform does.
By compiling your data, it enables you to deliver more personalized marketing messages at scale, which is what Ed does through the application of a five-part framework called Who, What, Where, When, Why.
Here’s how it works:
Who: It starts by defining your data-driven customer profiles. Understand the customer journey based on how people buy and use your product, and then create a set of customer segments that will enable you to deliver personalized messages addressing the needs of each segment.
What: Ed’s mantra of segment first, content second allows you to define what it is you will say. Craft your message and then use dynamic content to achieve personalization at scale.
Where: Which channels should you share this message with? Basically, all of them. As Ed puts it, you want to aim for delivering personal messages across multiple channels to help nurture each person along their unique customer journey.
When: Your message should be timely based on the activity and lifecycle stage of who it is you’re trying to reach. If someone’s on your site then you want to reach out at that time. If someone is slipping away then you need to be able to re-engage them. If there is a relevant discussion someone could chime in on then you need to reach them at the right time.
Why: Ultimately this framework is there to support customers at each stage of their journey; from acquisition to activation, from free to paid, and from paid to expansion. Essentially, have a goal for each stage of the lifecycle that will give purpose to your growth operations.
In summary, it starts with who you’re targeting, then you can define what message you send, which you can roll out across all channels, at the right time, and finally at every stage of the customer lifecycle.
Marketing, sales and customer success teams typically own the various stages of the customer journey. In addition, growth teams often float across the organization to work on experiments within a function, whether it’s new user acquisition or onboarding flows.
But there is one key discipline that holds everything together; product marketing.
For Jessica Webb, who works in a relatively unique product marketing role within Trello’s growth team, product marketing is a function that sits at the intersection of marketing, product development, customer and user acquisition. Their success is based on two key points; acquisition (sign-ups) and activation (MAUs).
From an acquisition perspective, this means the product marketing team must truly understand the customer. With Trello being such a horizontal product, former HubSpotter Jessica realized the traditional persona approach wasn’t going to work, so the team found the Jobs to be done framework much more applicable when it came to understanding their key customers. This enabled Trello to provide empathy towards the end user and talk to them in a human way.
Then from an activation perspective, product marketing owns that first experience a user has, and that’s all about providing value to users as quickly as possible. Optimizing the activation process means increased engagement, which means Trello is much more likely to retain users who will then invite others to join the app.
While product marketing has traditionally been externally facing, for Jessica it’s also very much an internal-looking role since product marketing needs to have a 360° view and keep everyone updated and aligned on what’s going on when it comes to launching new features or even a brand new product; it’s the glue that holds everything together.
HubSpot is a powerful platform for marketing and sales, but it’s also a complex sell. Having started with an inside sales team before moving into freemium, managing the balance between offering a self-service sales model or a high-touch sales model became challenging.
When chatting with Kieran Flanagan, HubSpot’s VP of Marketing, he mentioned that the key to growth is ultimately about being able to allow all your customers to buy the way in which they want to buy, particularly when it comes to upgrading your free to paid users.
So to tackle this challenge, Kieran and his team tried to figure out the right points when a user would want to talk to someone or if they would just like to upgrade themselves. After mapping these points, they then ensured users were able to upgrade as seamlessly as possible, whether that was touchless or through discussing with a member of the sales team.
In short, match the way you sell to the way your buyer wants to buy
It started with a phone call.
Drift CEO David Cancel called Dave Gerhardt and said, “We need to kill all our forms.”
The entire marketing playbook was built around marketers hiding their best content in pdf format behind a gated form, because that’s how we generated leads. And that’s how Dave Gerhardt and the Drift marketing team had generated leads too.
But David Cancel realized that it’s a poor user experience, so rather than following the same playbook used by marketers, the Drift team killed all their forms overnight, ungated their content, and started making marketing more personal, human, and conversational. Although a little shocked to receive the message of that call, Dave quickly realized this made total sense and that marketing had lost its way. “10-15 years ago it was about opening the door and starting conversations, and then we over-rotated and became about lead generation and MQLs.”
Applying first principles thinking will enable you to question what it is you’re doing when it comes to marketing and develop new practices that are both different to what everyone else is doing, and more importantly, deliver a better customer experience.
So what can you do differently to everyone else?
Write your own marketing playbook.
When Lidia Lüttin joined Dutch startup Bynder in 2013 as employee number four she was responsible for marketing in neighboring Germany.
In order to start generating high buying intent leads, one of the first things Lidia did was to create a digital asset management comparison guide, which compared features of all the leading platforms to help buyers make a purchase decision. Quickly after launch, it started generating very positive results, so in order to take advantage of the opportunity the team quickly translated the guide into multiple languages and boosted it with a Google Adwords campaign – still today, this is one of Bynder’s best performing content pieces.
So when you’re starting out, Lidia’s advice is to focus on end funnel leads and aim to acquire high buying intent traffic comprised of people who are already looking for a solution like yours. Then have very simple conversion paths on your website and optimize using tools such as live chat, which have been a great way to convert visitors into leads and auto push relevant content based on browsing behavior.
As a marketer of an enterprise platform, for Lidia it was all about lead gen and delivering those to sales in order to gain feedback, iterate and scale up growth. To do that, just go for the low hanging fruit.
“We need to update our website.”
We’ve all heard those words before, or even said them ourselves, before embarking on a big website redesign project that takes place every 2 to 3 years.
But Luke Summerfield of HubSpot realized this traditional approach to web-design is broken, since what happens after those big redesign projects is nothing. You spend so much time and effort working on the website that when you hit publish you breathe a sigh of relief and pat yourself on the back. But the reality is that that’s when the work begins since you then need to test, learn, iterate and repeat.
Simply put, we need to rethink the way we manage and develop our websites.
Rather than having the big redesign every two years, Luke is an advocate of a different approach that is built upon a more agile and lean sprint-based framework. This is what Luke calls Growth-Driven Design, and that’s why he started the GDD program at HubSpot, because there is a smarter way to do web design.
A big battle content marketers face on an almost daily basis is that between quality and quantity of content.
When Karola Karlson started Aggregate, a blog about growth marketing and facebook advertising, Karola focused on short-form posts that quickly explained a tip, trick or hack. After some time she then wrote a long-form post about how to build an audience and drive long-term traffic to your blog. This one post took considerably more time to create, but it drove considerably more traffic than 10 shorter posts combined.
It was at this moment that Karola pivoted her blog strategy and went from two posts per week to one post every two weeks.
The results? Huge growth in traffic with increased site engagement.
So when it comes to this battle, think long term when crafting content and aim for organic traffic that will deliver compounding returns over time. Quite simply, less is more when it comes to content.
What is the purpose of content marketing?
Is it to increase awareness, acquire new traffic, or build your brand? It’s a simple question but it would most likely generate an array of answers from content marketers.
For Ed Shelley, he had been building ChartMogul’s content efforts for some time before it dawned on him…
Ed realized that the purpose of your content should be fully aligned to the purpose of your business.
At ChartMogul, they’re mission is to help SaaS companies build a better subscription business. Therefore, every single piece of content Ed and the team produce should in some way help SaaS companies build a better subscription business.
It’s a refreshingly simple philosophy when it comes to content marketing, but take care of that and the rest will take care of itself.
Word of mouth is one of the most effective ways to grow a business, the reasons being that it is both hyper-scalable and extremely cheap. However, in order to benefit from WOM you must build a brand that people love.
Bill Macaitis, first marketing hire and former CMO at Slack, stated that “a brand is not your slogan, it’s not your logo; it’s the sum of every single touchpoint a customer has with you during their journey.” And the functions that have the greatest influence on brand experience are the go-to-market teams, or more specifically marketing, sales and customer success.
Having bought a lot of software himself, Bill found that buying experiences in B2B typically sucked. You were forced to fill in 17 form fields of personal information to unlock gated information, which resulted in an immediate phone call, and in the occasions when you did buy, the interaction dropped, you got no support, and you were pretty much left to your own devices.
So at Slack, Bill helped foster a culture of customer-centricity. Internally that meant hiring against a set of key values, with people who had worked in hospitality or the service sector scoring particularly well, and externally it meant doing everything to serve the customer.
For example, if customers stopped using the product they would provide a refund. The team also spent less time measuring sales but rather the quality of the sales, so metrics such as NPS and CSAT became more of a focal point than revenue. If they nailed that customer experience across the whole journey then they knew Slack would benefit twofold from its evangelist customers; firstly they would boost new user acquisition via word of mouth, and secondly they could grow the business via expansions and upsells.
That’s the power of a strong brand.
And a culture driven by customer-centricity.
In the consolidated world of SaaS, it’s becoming increasingly difficult to compete on features, price or product. In the early days of SaaS, being one of the first to market was a competitive advantage in itself, but the commodity is no longer enough.
For example, if you launch a CRM, you won’t be able to challenge the likes of Salesforce on features. You need something else, and that something is brand.
Gibson Biddle, former VP of Product Management at Netflix, stated “Marketing defines the brand and product brings the brand to life by building a great product. Together, the two teams hope to create a world-class brand and product.” Brand is way more than some fluffy values or your visual guidelines, it defines who you are as a company.
And Liam Boogar states that there is one core ingredient that, no matter what your brand stands for, must be at the heart, and that’s authenticity. Because even if copy-cats can replicate your prices, features and products, an authentic brand is something that only you will ever truly own.
A strong, distinct and authentic brand is a moat that not only protects the long term future of your company, but also provides you with a competitive advantage.<
When Madhav Bhandari joined Hubstaff’s marketing team back in the early stages of the company, revenue was owned by marketing – and pretty much just marketing. Madhav and the marketing team spent their time working on experiments and initiatives that would help hit revenue-specific goals, but other functions within the company were focusing their efforts on different areas.
Realizing this challenge, the team came together and agreed they needed alignment around one common goal. In this specific case, Hubstaff agreed their primary goal was to increase MRR to $65k by the end of the year.
With this common understanding, the entire company would focus every strategic decision, every task, and every detail around hitting this goal.
In addition, every team had their own set of KPIs, each of which would contribute towards the achievement of the common goal. For Hubstaff’s customer support team it meant reducing response time from 20 minutes to 8 minutes since that would help reduce churn and boost MRR. The development team set KPIs around an improved user experience since that would increase retention, reduce churn, and hence also boost MRR. And then the marketing team set KPIs based on new user acquisition and being able to find the most effective channels to drive scalable growth.
With the entire organization aligned around a clearly defined common goal, from the company founders to virtual assistants, every action was contributing to the team’s success. It was this focus and alignment that enabled Hubstaff to surpass their goal and achieve $70k MRR by the end the year.
When it comes to SaaS growth, a lot of discussion focuses on hyper-growth tactics as companies bid to become the next tech unicorn. But unicorns are rare and they are outliers, and as Steve Rayson of BuzzSumo pointed out, there is another route…
By putting sustainability and profitability above hyper-growth, BuzzSumo has built a steady SaaS business that is loved by growth and content marketers alike, going from beta launch to $5M ARR within three years. This is what Steve calls a SaaS Donkey.
By bootstrapping, BuzzSumo kept its destiny in its own hands, which allowed the team to first focus on profitability, which they scaled their growth on top of.
Some of the key factors enabling them to do this were building a large fanbase through the BuzzSumo beta, a freemium model that facilitated word of mouth, and through building valuable relationships with key influencers such as Rand Fishkin and Matthew Barby, who would go on to become brand advocates for BuzzSumo.
In Aesop’s famous fable, it was the tortoise who beat the hare.
And in SaaS, the donkey might also beat the unicorn.
We all have worries, anxieties and fears about our work. Whether it’s reaching an ambitious growth goal, securing the next funding round, or successfully launching a new product to market, there is often something keeping us up at night.
For Marie Prokopets, Co-founder of ProductHabits & Draftsend, it was public speaking.
When you’re building products and companies within the tech and SaaS space, speaking is becoming part and parcel of the founder, leader or manager’s role. So when Marie was invited to speak at SaaSFest in Boston, she accepted knowing it would be a good opportunity to face her fear, but without realizing how big the conference had become. This is when she started to freak out a little and the bad scenarios started appearing in her mind.
Having a strong background in consulting and strategy before getting into SaaS, Marie had a lot of experience speaking, but more so in smaller settings. Realizing she could no longer continue living like this and relying on her co-founder, Hiten Shah, to do all the speaking, she decided to conquer this fear.
Marie spoke with friends and got advice from others who had experience in public speaking. She used mindfulness and meditation to understand the fear, which enabled her to identify the root cause. Once she solved the underlying problem, Marie moved beyond those fears and just started practicing and ultimately ended up getting nervous about not being nervous as she took the stage at SaaSFest.
Face your fears!
When building your SaaS company, there will be challenges you have to deal with that you never even contemplated. It’s all part of the journey, and no one knows that better than Hotjar CEO David Darmanin.
Being from the tiny mediterranean island of Malta, David and the team knew they would have the challenge of building a fully remote company from day one. After launching a successful beta and generating 60k sign ups through a gamified referral program, they had the challenge of converting free beta users into actual paying customers. And after assigning a $29 price to their lowest paid tier, they had the challenge of managing a price point that they soon realized was too low.
But remote work practices, conversion from free to paid, and pricing are all challenges you know you’ll need to tackle. It’s the unexpected ones that have the ability to really derail your progress.
And that’s what happened just days before Hotjar’s commercial launch.
The culprit? European tax law…
David and the team realized Europe’s relatively complex tax laws could hugely delay their release. There is a concept known as VAT, which stands for Value Added Tax, and it’s essentially a sales tax for goods and services for each European country. The thing is, each country within the EU can set its own tax percentage, meaning the team would need to completely rethink and modify their legal and financial operations. This was the last thing on their mind, but after multiple phones calls with lawyers and a few late nights, they were somehow able to deal with the situation and launch as scheduled.
And of all the lessons about growth, this is perhaps the most important – you will always face challenges. You will always need to find creative ways to solve problems. And you will always be tested. And that’s because growing a SaaS company is hard. And that’s exactly why it’s so great to work in this field.