8 marketing tactics of high growth companies that you should steal



I had the pleasure of talking to some very savvy entrepreneurs this weekend at Startup Camp Berlin, where I moderated a panel called “Lessons from high growth companies”. The panelists were Robert Phillips, VP of marketing at Sendgrid, Steffen Zoller, founder of Betreut and Eldad Ben Tora of BlueSnap, an Israeli company that specialises in payment solutions.

Eldad had some unique insights because his company not only was a startup until it was sold, but also because hundreds of SaaS startups around the world use BlueSnap to process their payments.

Betreut is a marketplace for caregivers, offering anything from babysitters to dog sitters to caregivers for the elderly. It was an early Rocket Internet company (“not a clone”, Zoller specified), that grew to about a 100 employees in Germany and was recently acquired by its US based competitor Care.com.

Sendgrid is one of the largest e-mail deliverers in the world – they deliver 7 billion “transactional” e-mails each month. If you don’t know what “transactional e-mail” is:  it’s those e-mails that you get sent when you want a password reset, or when you receive an invoice for an online purchase in the mail.

Sendgrid started in 2009, long after most bulk e-mail providers, but it managed to create a market for itself before the incumbents really knew what hit them. Sendgrid overtook marketing e-mail solution MailChimp last year, and they are now twice as big as Mailchimp. “We just started in a small niche that everyone in the e-mail industry had overlooked,” Robert said. “And suddenly it became a huge market.”

Between the three panelist, they shared a huge number of marketing and growth hacking tricks that will help your company if you start doing them now.

1. Stop overestimating how much people love you (Sendgrid)

Robert Phillips, Sendgrid

Companies, especially startups, overestimate how much people love their product, says Robert Phillips. That’s why he always establishes a startups “net promoter score” when he first arrives on a job. The net promoter score is deduced from interviews with customers, and it essentially asks a very simple question: “would you recommend us to your network?”

Companies can score anywhere between – 100 to + 100, said Robert, and they do. A score of 20 is good. Score 40 or 50, and you’re very good. This means that a lot less people than you probably think recommend your service or product to others. If nothing else, finding out the NPS for your startup might be a good wake up call about areas you need to work on.

2. Be twice as expensive than your competition (Betreut)

You have to take this with a grain of salt, obviously, but Steffen Zoller made a very good point here. He argued that you should find out the price elasticity of your product, and try to price it as high as possible – and definitely higher than the competition. “We made a conscious decision to be at least twice as expensive as our competition,” he said.

For one thing, a higher price imputes a higher value of your service, and might actually help you convert customers. But more importantly, the additional revenue that you get per customer will allow you to spend more on acquiring new customers – and that’s how you can outpace even long standing incumbents. In the case of Betreut, Steffen founded his company seven years after his competitors had launched. At the time of his launch, his competitors had 2 employees, he said. Today, Care.com/Betreut  has 100 employees in Germany. His competitors still have 2 employees. Money fuels growth.

3. Don’t use a freemium, or if you have to, make it very limited (BlueSnap)

Eldad Ben Tora

Eldad Ben Tora said that a freemium is not the best way to make money, and making money is after all the point of your startup. “If you have to use a freemium, make sure that people bump into the limits of the freemium soon enough.”

The problem with freemiums, he said, is that people just don’t convert very well to a paying subscription. The tendency is to make the freemium attractive to get a lot of users soon – but you want paying customers. Also, from the Bluesnap statistics he can see that “a subscription is still overwhelmingly how you make money.” Selling a solution once is not enough to create a scalable business, because you can’t recoup the cost of customer acquisition with a one time transaction.

4. Make people invest in your product (Bluesnap)

Another controversial one, I’m sure. Eldad suggested to have people invest a bit in your product. Let them take time to set it up. When I said that we have learned in economics to disregard sunk costs, he said: “Of course we learned that, but people don’t actually do it. We do value the time that we put into something.” Robert Phillips disagreed with this advice, saying that Sendgrid wants to make it as painless as possible to implement the solution.

5. Test, test, test (Sendgrid, Betreut)

Sendgrid uses about 30 tools for testing, among which Optimizely, said Phillips. Does testing work? Yes it does. If you check out the Sendgrid homepage, you will notice that everything is in the same color palette, except one link. “CONTACT SALES”. Changing that from white to green increased conversion to that link with 60 percent, said Phillips. That’s mindblowing.

Check out this screenshot of the homepage: your eyes are automatically drawn to the green and the orange – both of which are clear conversion buttons:

Steffen Zoller

You don’t have a budget for real A/B testing? Steffen Zoller didn’t either, when he started Betreut. “The opportunity cost of putting a developer on the A/B testing would have been way too high,” he said. What he did was a kind of sequential testing. By trying many things in sequence, he got an idea of what worked and what didn’t.

A lot of work went into converting people on the landing page of Betreut. The big breakthrough for Betreut, says Zoller, was when they got rid of their search box on the site and had customers tell Betreut what they were looking for via a drop down menu. So instead of forcing customers to do a search with keywords, the site now offered a choices like “I’m looking for: elderly care”, or “I’m looking for: dog sitting”, etcetera.

“From that point on, it became a lot easier to drive conversion, said Zoller.

6. Use retargeting (Sendgrid)

“Retargeting was one of the first things I did when arriving at Sendgrid. It’s so powerful, and it’s also relatively cheap,” said Robert Phillips. Retargeting works like this: when people visit your website, your site leaves a cookie in their browser. When they visit other sites, the cookie will tell Google or Criteo (or other platforms) to serve one of your ads. That way, in the weeks following your visit, they are constantly reminded of your brand. “It makes people think you’re a huge company,” Phillips laughed, “because after they visited your site, they see you everywhere.”

Warning: retargeting may lead to “ad fatigue”. Just today, I read an article in a Belgian newspaper about retargeting, where a journalist complained that he was being “followed around” on the internet by a pair of Nike sneakers he had watched on Zalando. On the site of Adroll, which specialises in retargeting, I read these best practices, which sound like good advice:

“Retargeting creative performs best that has a clear call-to-action and promote an offer. Different products warrant different retargeting time windows. Eg, people shopping for travel should be retargeted immediately; people shopping for luxury goods should be retargeted later.”

7. Use content marketing

Sendgrid publishes 25 blogs per month, and organises 2 webinars each month. Read that again: 25 blogs per month. I told him that the hardcore business blogging in Europe hasn’t yet taken off, and he said that in the US, it was also a quite recent development. Does content marketing help?

Phillips is convinced it is. It sends leads to your website because of the SEO, and it converts leads into customers. “There is one catch,” he warned: “Just putting out content isn’t enough. It has to be good content, aimed at your demographic.” In the case of Sendgrid, he said, the blogs that work best are the ones that squarely hit the developer community.

8. Don’t give customer a reason to abort the onboarding

What always surprises me is how much effort companies like 99designs put into localization of their websites. Eldad gave the explanation: because it increases conversion – by as much as 30 percent, he said.

“You should really put an effort into getting good translations and offering the amounts of your products in the currency of the customer. All those things matter a lot. When someone is buying online, it’s about trust. And customers are almost looking for a reason not to complete the transaction. You should also think very hard about all the fields that you force customers to fill in before they can purchase. The rule of thumb is that every field decreases conversion by 1 percent. Likewise, it always amazes me that SaaS startups force people to input all their payment data again when doing a second purchase..”

Every additional field causes friction. “You know these fields where you have to put a phone number? You know how frustrating it is if you get the format wrong and you don’t know which format they expect? That’s when people abort the onboarding. You want to make the registration and signup easier, not harder. So think very hard: do I really need that field?”

Got more tips? Let us know in the comments.

[Photo: Ed Kohler, Flickr]

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About the author

Raf Weverbergh

Editor of whiteboard. Raf Weverbergh was a magazine journalist whose work appeared in magazines like Rolling Stone, Playboy, Mail on Sunday, Publico and South China Morning Post. He is the co-founder of FINN, a corporate communications agency where he advises startups and multinationals on their PR and Mustr, the easiest media database for PR professionals. You can contact him on Twitter, Linkedin or Skype (rafweverbergh).

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