This Free Microtool Strategy Drove Huge Wins at Every Point in the Funnel

Rex Biberston
Jan 19, 2021 5:07:44 PM

Growth Marketing Camp, Ep. 1

This Free Microtool Strategy Drove Huge Wins at Every Point in the Funnel

If you are just starting out in growth marketing, trying to look for your next job in growth, or simply trying to be better at your craft, consider this podcast as a peek into how leading marketing experts think about their campaigns, metrics, and what’s important to them.

 
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In this episode of Growth Marketing Camp, I sit down with one of the biggest names in the growth marketing world, Sujan Patel. 

Sujan Patel, Co-Founder of Mailshake, shares how one of his agency customers took a complex financial product with high churn and created incredible wins in new business, onboarding, and retention, all with this microtool offer strategy. 

Here's what you can expect on today's episode...

  • 1:45 - How this finance company leveraged their freemium product as a micro-tool to lower friction, drive traffic, and reduce churn.
  • 9:45 - The channel and strategy that was most impactful in MailShake’s success
  • 16:45 - The one thing that growth marketers should stop doing / start doing
  • 21:00 - Mailshake marketing team structure at a glance
Read the Full Transcript:
 

All right. Welcome to Growth Marketing Camp. I'm your host Rex Biberston with me today is Sujan Patel. I know him as the CEO of Mailshake and a few others, and let him do a little bit of introduction for himself. Sujan, tell us about your background. Yeah, Rex. Thanks for having me excited to chat about growth.

My background is in digital marketing, having been doing that for the last 16, 17 years since the early two thousands. I currently run Mailshake and a handful of other SAAS companies. I've just been buying and growing them, all B2B SaaS kind of focused on sales marketing, and then one oddball HR tech company.

Pretty much between that and my experience working as a consultant with various startups from think like Airbnb when they were like an underdog, when they were like, are they, this is a crazy concept to Intuit's to like all sorts of, e-comm to FinTech, to be B2B, SAAS, startups.

Yeah, I've just done a lot of different campaigns and failed a lot enough to where I know what doesn't work to give me a little bit of a direction of where to go. Awesome. No, that's fantastic. And we're going to talk about one of those successful campaigns you had today, but I think the most important takeaway already for me is, yeah, you got to fail a lot.

You got to try things. If you're not experimenting and failing, you're probably never going to succeed. So that's awesome. Talk to us a little bit about the background. So we're going to talk about one campaign in particular. I know it had to do with a freemium or a free product that you were leveraging.

Do you want to talk us through the setup of what was that company and who was the customer that you were trying to serve in that audience? Yeah, so I can't share the exact company name, but I'll tell you everything else. 

Targeting like small businesses, as well as folks that, and you'll figure this out by the more detail I get into it, I won't confirm or deny the name. But  the other part is  they're selling to folks who will want to do their taxes.

Do their bookkeeping and such, maybe they're like a freelancer or whatever. All the way to small businesses taking care of their finances there and what really at the macro level, what the idea of the concept was that like, this product was complicated, doing your finances and like doing that, the software to utilize it. You have to make a decision that I'm going to be. Yes. I want to get ahead of myself where I want to get ahead of my finances. I'm tired of doing it at the end of every year and scrambling and many pain points of not doing it. I'm tired of many pain points not doing it.

The list goes on. But the friction point of the software is that okay to fully activate, you could utilize it and sign up and pay for it even, but to fully activate, you actually have to like, load your books , your counting, your  statements and all that detail into this software and then categorize and do some work.

So a lot of that initial work is a lot it's just a high friction point, but that being said, obviously they need to overcome that they need to grow. And what happened was a lot of people bought the software, but then they had a lot of high churn rate. So it wasn't actually preventing them from actually converting people.


It was just preventing them from keeping customers because people would buy it like, oh yeah, I need to get around to that. And then eventually it gets around, I need to stop paying for that, I'm never going to, I'm not doing that right now, but,  so they started thinking about ways to reduce the friction points.

And obviously with reducing friction points can come in tools, people, UX, simplicity, changing whatever, and then they're thinking about in addition to like this, the, these ideas. They just ran a lot, a bunch of them. Do they solve other problems? Like top of the funnel, can they help bring in more customers?

So I think they thought about the pain points these customers have and  they launched micro tools to help you not get a hang of your whole finances for your business, but to solve one small problem . Hey, import your finances here and we'll do it for you, or import, and it was like these importers from your bank, and it would do like a 30% semi machine learning-esque thing to categorize your books into the right categories. So that it would do probably about 30% to 50% of the work for you, and it turns out so anyways, again, they can't mention the name of the tool, but what this thing did, was it helped again, solve a problem, but then it also, it helped solve that envoy problem, but it also did, was it could be a great way to actually get customers too.

So again, like the pitch is way easier when you say, hey, like just, use this software it's free, so it's free  and we'll do it like this. We'll organize your books and so you have to spend minutes or hours doing this vs. days and weeks they'll just get the preliminary stuff for you to review , and then the way they tested it, they tested different things for you to review.

It's oh, this will get the preliminary stuff so that you could save money on your accounting and when you send this to your accountant, they can take it from there. And so they built an exporter and importer and exporter importing whatever bank you work with. And then it would just categorize your books.

It's very simple in terms of what it did and then export to whatever accounting software, one of which was their own software. So they didn't actually build this as a main tool, which allowed them to build it way faster. They didn't have to build inside of their ecosystem. They just built a third-party tool that then synced up with their two at the other end.

And yeah, so they use this to drive a bunch of traffic. Get people to get started and then they use sales to get them down the finish line. And in terms of the cost per acquisition or cost per a free trial of their main product was around about $100 to $150 a signup. Like whether it's a demo or signing up for a free product.

The cap total was about $550. The sign up for this free product, because it was way simpler and actually getting people to use it  was way closer to the, like the signup process. It was about $25 to $50  and at scale is closer to 50 starting off, it was 25 bucks to get a user and the CAC to get a customer of their main product from this thing was $300.

So like almost half. And so what I like about this idea, and I know I'm not saying the name or whatnot, but you could see the amount of accounting softwares out there. And then the couple of names I mentioned in my introduction of myself and you'll figure it out. But but yeah, it was really simple because it helped reduce the CAC quite a bit.

It helped open up marketing and the top of the funnel and it helped reduce the friction point and the starting point of this and friction/churn of the software. So I think the best marketing strategies, the best marketing ideas involve leveraging the product, or even taking bits and pieces of the product and say let's just make this standalone, let's just go do that. And without it, and what's really crazy about this is, so the story of Mailshake is that's actually how we were born. We had this complicated content marketing platform that let you find all the folks, give you the opportunities of folks to reach out, to let you do outreach via email that you do outreach would be a message, a Twitter, LinkedIn, and some social media platforms, and also help you tweet and share stuff on the web too, to tag the people you're going to ping .What turns out that people loved was this like, outreach part, right? Not a very genius idea on its own, as many people who have done this or do this now. But we only found that out by making all these random micro tools. And so it has worked and I've seen this work many times before is using features or using a function of your product independently of your product as a micro tool, and then launching and getting traction because it's so simple.

But it's complicated enough to where it requires depth. It requires you to think about a product that not enough people take advantage of. Yeah, man. That's fantastic. And it reminds me so much of HubSpot micro tools I've used for years I've recommended like their persona builder to probably 200 people.

Many of whom probably went on to become HubSpot customers because it was so easy to get involved with the brand and oh, wow,  I can just take this and put it right into HubSpot. Oh, this is great. So I love the example here and I think it highlights that it's not ,for you guys it wasn't about hey, which channels should we pick?

And what spend you had some of that already honed in, you already knew where your costs were going to be, but it was much more about the strategy.  Can we nail the right idea, the right concept behind this before we worry about everything else. Now I do want to dig into a little bit of the execution of some of that.

What channels did you find were most impactful for you guys? Where were you spending highest? Where did you find that? Oh, we ended up cutting that channel out. That sort of thing. Like where were you focused? So the biggest channel was actually the, in the churn customers is email, but let's put it that way.

Email was the biggest channel. So all the people who didn't purchase the product all the free trial that expired, or like whatever, for the last year, two years, I think it went back like two years. There's thousands, tens of thousands of people on that list. Anyone who's churn, all got this. Oh, wow.  And so that was the biggest channel, because it was just free money.

It was like, it was free. And by the way, when my CAC calculations and the CPA calculations don't factor in the free channels, I was going to ask you that if that impacted them, that's amazing. Yeah. And the reason is to think about your life. Look how many people have signed up for Opensense and just not purchased, right?

Or like how many people have churn? I hate to say like a lot have, but like whatever that's been in the history of the company, those assets there, don't stop marketing to people after they've stopped purchasing. They may not want to use your product, but. It doesn't mean they might not want to hear from you.

It might doesn't mean they don't appreciate good content and you're right. It's exactly like the HubSpot, I would say is like the gold standard for a lot of this stuff. Or at least they were, I don't think they are anymore. Not to say that they're doing a bad job. I think there's companies like in strategies.

I think like they've got so much of the product already built, right? They've got, they've now done, this same play with micro tools to get their marketings back. They've done that for sales customer success. And it evolves because they're going out to a whole new customer base. So it doesn't work if you're like a marketing tool and want to go after sales now.

This strategy is not going to work for you. That's a pivot, right? But what this will do is if you're, I think HelpSpot built sidekick, which was now the sidekick was like ACO hired from their own main company and became HubSpot sales. Obviously that alone wasn't a HubSpot sale. It was a bunch of other stuff, but yeah it's a huge strategy.

I think Intercom does a good job. Intercom and drift do a pretty decent job with this, although  don't know, I don't think it's as they don't do it as successfully as HubSpot. And I think the reason for that is that in the marketing tech world, this strategy has been utilized to death.

It's been really utilized, and it's also because marketing tech is  competitive/saturated. It's hard to build a micro tool, but. In a space that has a solution that doesn't exist already. So now you're launching something that's already out there. And your core differentiator might be that it's free.

That's again, still possible, but that's a differentiator, it's hard. It's hard to say exactly if  it will work the same. I do think though, anyone that's not in marketing tech, which is most of the world of markers, right? B2B, B2C all of us work really well.

Take your friction points. Think about, so the premise here is take all the friction points from your signup, your onboarding, everything after somebody comes to you becomes a visitor. I'm assuming you can get people to the website. That's what I'm going to assume if we're talking to marketers here, but after the website to like becoming a long-term customer, what's all the friction points?

List them down, like in a timeline of the signup to like awesome customers, and then think about  those are the problems listed, think about what are tools or things you can do to make that better and people help too.  QuickBooks has a really good or TurboTax and QuickBooks, I think it's all into a brand.

They do a really good job of having accountants be available for chat. So now they're like, hey, look, we know people are doing their taxes. Okay. Talk to an accountant. Boom. Yeah. It was a friction point that led to an upsell.

No, I love it. I think that it's not just for new acquisition. I was going to mention that it seems like there's other places in your funnel. Once you get to the bottom of the initial sale, that funnel expands out, right? There's so many places where there might be friction. Currently. I love that concept.

Really smart stuff. If you had to do it all over again, or if you could, what would you change? Anything you would change, any places you would spend that you didn't spend, any places that you would modify something? Or do you feel like that was like a knocked down home run? No, I think I'm always, so I always try to do it again.

I run four, five companies in the County, these days I run five companies. So my goal is always to do it again, to set these things up, to be done over and over. And I've got so many playbooks out of testing and failing so often. So I think the big thing is like trying to get the idea to be not an MVP, but what is the minimal version of this idea that would work?

I think we spent a lot of time trying to get this concept to work. It probably could have been done in half the time. Had I simplified the idea down to its essence. The other thing is I didn't think about it, although I'm a marketer, because this was like an activation problem.

I didn't think enough about the marketing acquisition channels. And the marketing value, I knew the marketing value was this is going to help people stick around as customers and sign up to become customers. So I thought about this as like a middle of the bottom, more of the bottom of the funnel problem or post funnel problem for churn.

But, and then I said, oh, this could also be used for top of the funnel. And I think any idea you come up with always think about the top of the funnel and then what you're going to do that. So it wasn't until maybe halfway through, or maybe even more than that, I think maybe two thirds of the way, whether the idea was already flushed out.

Oh like maybe we can drive traffic, paid traffic to this  is the answer. Then, we did the math ,oh yeah, we can absolutely do it. But had I known that we could have done that. I could have done this way faster because now what I've got more buy-in to go do it, or I have a bigger idea that has a greater impact in it again.

Yeah. It did help with conversion and keeping customers around, but that was peanuts to like the top of the funnel. So had I done it again? I would just do the math and think about all the different ways you can leverage things because we spent like a few weeks going back and forth on honing down the ideas.

But if I did the math and all the ideas, this would have been the best one in terms of impact. And it would've just been, it would be one meeting away from being started,  versus like a feedback loop and whatnot. Yeah. That's great. This is an awesome zoomed in look at a campaign for one of the companies you've worked with.

I'm sure we could probably do this for the next year and still have content to, to talk through all the different times  you've tried these things.  That's a clear win and a really fun campaign to learn from. I would love to zoom out a little bit and just talk about your take on growth marketing and marketing in general, but particularly because, you're like one of the people I think of for growth, right? Like you've had to take things from A to Z. You want to get them to some point I've read a lot of your content sharing, how you've done that with your companies and there's a goal in mind. So I think, growth is you could maybe make it your middle name.

But I would love to hear your take on a couple of these thoughts or these questions. So the first one is, what's one thing that growth marketers should stop doing that they're doing now, or maybe start doing that they're not doing yet? I think the stop doing part would be to stop focusing on what they read about, or like the Airbnb examples, like all the growth tactics that you know about  it's, think about them as everything has an expiration date. Use them as inspiration. Don't try to copy them. I find like a lot of people are like I got to add some virality to my product. 20 years ago when Hotmail pulled that awesome stunt off, there was no, there were not 8,800 other SAAS companies that were  trying to get their attention. 

Email was a lot earlier in its age, Dropbox, same thing, Airbnb, when they like leverage Craigslist for a lot of this stuff. Those things, use them as a gold standard of an example, but as inspiration, right? Not in, don't try to mirror what they did, it won't work.  What people should also start doing, and like, this is not a new concept. Marketers should be doing math, but they should be doing the math on their ideas before executing. And I find a lot of times,  people don't think through the full benefit or whatever of the idea.

Or the value it's going to provide. So one, when you do the math, it forces you to choose what metric is this going to impact? Like is it gonna help me get more traffic? Is it gonna help me get more email opt-ins again, let me get more leads, sales, demos, purchases, keep customers? Whatever it is, I don't care.

And then then work backwards to that. Okay. If I need to, if I think it's going to help get me more customers. Okay it's going to have to go from traffic to customers. Let's just do the math X idea will generate Y traffic and Y traffic we can convert to Z, and the Z will turn into A for a number of customers.

It will provide, right? There's a mathematical standard.  Right? Let's say 10% conversion rate from visitor to trial from visitor to trial or demo and demo to a sale is 50%. So now you've got a number, too often do people like get infatuated this oh, I've got this really awesome idea.

I got to go do it right. And this, I, this is a very I have this like jarring memory from a friend of mine who runs an e-commerce company. And he's oh, we're going to get, we're going to do a co-promotion with T-Mobile, and I'm like, oh, and they have a list of I don't know, 70 million emails.

That sounds awesome, but at 70 million emails, what is their open rate? First of all, number one problem, what's your click-through rate? So like 70 million times point 0.15 and a 15% maybe, and then what's the click through rate on that? Maybe 1%, how much traffic is that actually? And then we already know, I won't call him out specifically, but his e-commerce product and T-Mobile are very different.

Very different, like customer base, right? Like just very different. Now T-Mobile does a lot of these promotions and things as value adds to their, like for their subscriber network. And they use it as a good marketing strategy. So it's an amazing marketing strategy for T-Mobile not so much for my friend who runs an ecommerce business that wants to try to get I don't know the people to buy whatever.

And so it turned out like this awesome thing with 70 million T-Mobile subscribers like emails, subscribers would generate, I don't know, like 150 sales. The guy gets like thousands of sales every month. So this would be less than 10% of his business, but the amount of time his brain power was spent on, it was like one week.

Like it's like why? Yeah. Yeah. So anyways, do the math on your ideas. You'll thank me later, because really it's the age old principle of measure twice, execute once. Yeah, that's funny. I grew up here in that garage  my dad built something, measure twice - cut once. 

Absolutely. Talk to me about, I think particularly with Mailshake because they're a brand I think that we see all the time in the marketplace, you guys have done an incredible job with marketing in terms of brand awareness. Talk to me about the structure of the marketing department there. How many folks are there? What are the teams? What are the roles like there? Yeah. Marketing department is four people. And then we had to get half a person, which is like a sales or sales manager kind of sits in on marketing meetings. And I say half because he comes with a really good idea. It's like we leverage, or we try to like solve his problems,  it's hey, he's not a marketer, but he comes up to us and he's look, we've got this problem.

We got our no show rate for demos, it's too high. We've got to go fix this. And it was like, oh, we can just add a couple of form fields. And we can like, obviously it wasn't like as simple as just adding two form fields, but it was like this solution to his problem was like adding in a phone number field, which is optional.

But people, we don't present it as optional, we just present it as enter your phone number. So I don't know, half the people who sign up do. And so then we can actually call them and confirm that they're going to show up for the demo or text them. So all because you brought a sales person to a marketing meeting.

I love that idea. I, how many of us have ever even thought to do that? It's great. Yeah.  And make sure you tell them before you join, before they join, just sit and listen. Don't come in and contribute, don't try to contribute. And then on the other end, a person that's on the meeting of the maybe the VP or whoever they should make sure that they have that sales person's time to talk or get their ideas in advance.

And so that they're heard and they can add to have their kind of 5, 10 minutes of the meeting, but that's the point where they're like doing it, or maybe, some other companies we do the sales team or sales person joins the beginning for the first 15 minutes and it's a sales and marketing conversation, and then it's done and we have a marketing only conversation.

But yeah, so back to this, the back of the team of 4 people, Mailshake's core channels for growth, word of mouth and brand, so that's our product ,doing the work, heavy lifting. It's the user interface to use simplicity, the UX of the product that generates this. And that came from like us doing our work on our competitors

when we built the product like, how can we win in this space? How do we build something that's unique? Everyone complained about the clunkiness of our competitors. So we just focused on the exact opposite of that. So again, that was the marketing strategy number two channel, and the only other channel we have is content and SEO.

So our team is predominantly comprised of SEO or kind of organic folks. We recently hired a VP of marketing to take over the day-to-day ops of marketing for me.  And then I go focus on the product and I focus on the market product because that's our biggest channel for growth.

So it isn't, I'm not doing a marketing function any longer,  but I'm still the product team now has a marketing leader who's like thinking about customer value to all the features and functionality that they build. That's awesome. That's awesome. I love that structure, makes total sense for you guys.

I think the strategy makes total sense. Now, if this is more my own curiosity building up, as we're talking about this kind of nimble team, that's really thoughtful. Hey, we have two primary channels. If you wanted to pull a lever  to double your growth, right? Obviously everybody always wants to grow more, especially listening to this show,  if you could pull one lever right now, if you're talking about SEO, that's, usually long-term, you're talking about a longer play.

Their product is definitely something that's going to take awhile to develop maybe some features and facets of it. Is there something you've found? Is it I know you guys do a lot of events. I've actually participated in a few of them. I love those. You bring some thought leaders together and share their insights.

What's that lever that you pull, if you just wanted to try and hammer home a big  quarter? Unfortunately this is our Achilles heel of our marketing strategy is we don't have a lever that we can pull. Maybe we can send a couple emails, cause a couple of emails to our audience or lists.

That is an asset that we don't,  like we try to just keep giving value. And then, so we, when we have something to say, we can pull that lever. So maybe it's that, that would say that's our best one and it's a weak one. I'd say that's an area where we're weak, because we don't have very many channels.

And that means like content SEO is not you don't wake up one day. Like I'm going to double down, I'm going to go spend 10 times the amount and then, a month later. But yeah, I got all that value. I got most of that value. It's one that is the slow investment and you hope for the best and you get the value at the end.

So unfortunately it's an area where it is probably weak at.  But isn't there something to be said for that. I love that,  hey, it's its own the slow growth in terms of not being able to just pull a lever, cause then you're not always tempted to pull it too. Because then your email list doesn't suddenly become so saturated that they don't want to hear from you anymore.

Even within, the weakness lies of strength there. That's really interesting. Absolutely. I think we try to focus in the long term. Again, like it is, I would love, the grass is always greener, right? So as a marketer as a kind of growth person, I'm like, oh man, I really wish I had another lever.

Which don't get me wrong. This doesn't mean we're not trying to come up with new levers. Sure. Our actual issue with this is a really funny issue to have,  is that like when we do the math on all of our ideas that we try to spend 20, 30% of our time on as a marketing org, they don't, they're peanuts to our main channels.

It's like, why don't we just use them more? We always go back to why don't we just do more of what works and instead of these crazy, not that they're crazy. It's just okay like we can go spend a bunch of money on advertising or we can find opportunities to get more opt-ins or more content out the door that can get opt-in or get people down the funnel that can get people.

And or get our remarketing down, again so it's almost like making this wheel move fast. That's why we'll move faster or make the flywheel bigger instead of doing a whole new channel, that being said, there's weaknesses into that, which is what one of the things is you don't have as easy of a lever to pull.

And the other thing is that funding doesn't help us like to like, there's so you have a lot less flexibility if you only have this big ship, right? Yeah. Versus more diverse channels. So again, we plan on changing that and leveraging some more strategies, but hey, look, I'm not going to complain that people, we invest money in content and SEO and bring thought leaders and people buy from us right.

And more year over year than the last. Yeah, and that's growth. That's awesome. Sujan, I'm sure everyone who listens is going to get something unique to their perspective. They're going to learn something new from this. Who, in your network of folks that you think of as great growth marketers who, somebody who you look up to, or who's doing some interesting who you think we should talk to here on the show?

I think maybe Hiten Shah would be a good guy to talk to.

I think he's more product kinda  focusing on that, but it's been there, done that for so long that he's got a very good growth kind of mindset. He's probably the one I think of the most these days. I'm heads down and take a lot of inspiration and I take less value on the person who said it and more on the idea to the point where I don't remember jot down, like what, how I got there.

And yeah, I think part of that is also that I'm like a little less day-to-day growth and 2015, 2016, I was in the weeds on every little tactic. I would tell you that, like the numbers now I'm more focused on like, how do we move? What are like three or four big investments we can do?

I'm looking at creating levers and I work with my team to help execute that lever. Yeah. Awesome. Hiten Shah is one of my favorites. I listened to his show from Close.io for a long time. Oh yeah. He's been doing it for a long time, 500 episodes, I think.

 It's unbelievable. I'd love to get him our show there one day. But Sujan, thank you so much for being here for sharing your thoughts, your experience, your wisdom from the many campaigns you've grown through. And thanks for joining us, man. Yeah, thanks for having me. It's fun to show the story, the lessons and whatnot.


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