It’s a dull Tuesday afternoon in Austin, Texas and Amy is scared.The Series A funding round at the SaaS business where she runs marketing landed 12 months ago… and the CEO set outrageous growth targets.Her SaaS is in the sales enablement space, and specializes in giving salespeople email tools to maximize the efficiency of their outreach.She has done everything right… but the growth isn’t there. They have no freemium model and prospects must request a demo and speak to a sales rep before buying.Everything she reads in the space tells her that as your SaaS grows, things should get easier: more people know about you and more people use you - driving word of mouth. But if anything, things seem to be getting harder!Anyway, enough stressing... she has work to do today:
says it best:
Every SaaS marketer knows that getting people to talk about their product significantly reduces customer acquisition costs over time.
, where he discusses how $100 cheese steak sandwiches, secret bars in New York and the upside down logo on the MacBook drive word of mouth.
All these examples involve a person talking about a product with words.
And then the internet happened… now people have the ability to communicate without words, through fiber optic cables across the whole planet.
And
took on a whole new meaning.
Instead of finding ways to get people to
other people your product without words.
We’re calling it User Led Growth:
Growth driven by users exposing your product to new users.
So yes, we still need to do everything we can to make our products “remarkable” and delight our customers to drive old school word of mouth… but how do we leverage this new type of word of mouth?
As this in product, hyper viral marketing… when combined with the old version… can explode the growth of your SaaS.
In a typical SaaS business without a User Led Growth model, the relationship between customer acquisition cost and MRR is as follows:
Customer acquisition cost grows linearly as efficiency of marketing spend decreases and MRR tails off as it get's more expensive to acquire new customers.
And with User Led Growth, we see the inverse:
Customer acquisition cost remains stable with scale as each new user introduces new users, leading to exponential MRR growth (assuming churn is stable of course).
In the rest of this post, you will find 4 methods that high growth SaaS businesses are using to tap into User Led Growth:
MindMeister's an online mind mapping software.
Pretty simple.
And until their founder
was infected by the User Led Growth virus... their product had zero viral marketing potential.
A user would create a mind map... and that was it. They would look at it, edit it and maybe print it out. Growth was pretty linear.
And then BOOM.
They launch a feature that enables you to make your mind map public and their
started expanding.
Each public mind map was automatically inserted into an SEO optimized landing page with:
And did they start to rank?
This chart shows the amount of pages on the MindMeister domain that google indexes over time:
And this chart shows the number of keywords MindMeister ranks for:
A classic case of User Led Growth:
What are the assets your users create that they would happily share in exchange for status, notoriety or backlinks?
When using Webinar Ninja software to promote your webinar, you are by default promoting Webinar Ninja.
Almost everything you do with your Webinar is spreading the word about Webinar Ninja.
If your users must interface with other people to gain value from your SaaS then you need to be there right in the middle, collecting that sweet exposure.
Kind of like the finance industry... taking little cuts at every transaction, except you're not taking cash, you're taking attention.
Oh no, if you have people lucky enough to use your software, they must do it on your terms, with your brand front and center.
Not too bad, they're sitting on a tidy $640k MRR with 12k paying customers...
Oh and they're bootstrapped, read more about how they did that
.
Tech and finance people normally b*tch about the freemium model as it inflates their AWS bill and support costs without directly leading to revenue.
But they don't understand sneezing.
They think a sneeze is an annoying thing you do to clear your airways... not a viral communication vector.
Does the virus initiate a sneeze to use its host to spread itself... or is it the attempt of the body to cleanse itself?
That is a question for another post...
You can have your freemium customers "sneeze" for you if you incentivize them to share the value unit they create with your software.
Wavve do this by offering a freemium plan that inserts the Wavve branding on all the podcast audio images that customers create:
Note the "Powered by Wavve" border around the video below:
Check out this Wavve video by
We built at https://t.co/6vQa4nF7tU, you can create your own animated videos (like this one 👆) with waveforms and more to accompany your audio content! Go check it out now!#podcasts pic.twitter.com/YkXqPdT94Y
— Wavve (@wavve) May 30, 2019
BOOM - each new user that the CFO used to complain about when the hosting bill arrives, is now actively promoting your product to a qualified audience (people connected on social networks often buy similar things).
Have you ever jumped on a live chat, filled out a survey or scheduled a meeting through some software and thought:
Or...
In both of the cases above, the customer of the software is sharing the software (the definition of User Led Growth) with other people. In the former, they are introducing and in the latter they are reminding.
This is a design technique adopted by companies such as Intercom and Typeform... you can pay to remove their obvious branding, but the design gives a subtle reminder to the user that they are using an Intercom chat bubble or Typeform survey.
But the best example, has to be Calendly. I mean check out this new user (the person who wants to schedule a meeting with a Calendly customer) experience:
Even if you're not directly exposed to the Calendly brand (which you will be), you walk away from scheduling the meeting either thinking "Wow that was an incredible booking experience" or "Wow, I really need to get a Calendly account".
They do this through distinctive design. So even if the meeting host has paid to remove the Calendly brand, the product still spreads. A prime example of User Led Growth.
She shouts over the office to her product marketer, James… and they grab a meeting room to hash out some ideas.Fast forward 2 months… and it’s launch day of Amy’s new initiative. A library of the highest performing sales email templates from the users of their SaaS.They collected the templates by adding a simple “Make public?” tick box on each email template in a user’s account. If a user ticks the box, they have the option to share their name and a link of their choice that is inserted onto the SEO optimized landing page that showcases their template.With a click of a button, their CTO launches the “Ultimate Sales Email Template Gallery” into the wild and with that click, Amy just gained 2,000 SEO optimized landing pages that will drive qualified demo’s as she sleeps…And the best thing?She didn’t have to create any of the content. #userledgrowth
Which SaaS businesses do you know that enable their users to spread the word for them?
Please comment/ Tweet below with your thoughts...