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:
- Amy needs to map out a new funnel and searches Google for “funnel map example”
- Amy has to book her CEO onto a webinar with a partner, she signs him up using the link sent to her
- Amy is scrolling LinkedIn to review a new hire and sees a very attractive animated podcast video
- Amy needs to book her whole team in for 1-1 sessions, she sends them her call booking link
In the past 30 minutes of her normal day to day tasks, Amy has been exposed to 4 different SaaS businesses that she is a potential customer of… all at zero cost to those businesses?!?
Something clicks in Amy’s brain…
What?
This posts explains…
Seth Godin says it best:
Every SaaS marketer knows that getting people to talk about their product significantly reduces customer acquisition costs over time.
Jonah Berger wrote a whole book about this called Contagious, 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 word of mouth took on a whole new meaning.
Instead of finding ways to get people to talk about your product with words… people can now show 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:
1. MindMeister - User Generated SEO Gallery
MindMeister’s an online mind mapping software.
Pretty simple.
And until their founder Michael 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 Mind Map Universe started expanding.
Each public mind map was automatically inserted into an SEO optimized landing page with:
- Clear structure
- Multiple, simple CTA’s
- Social sharing icons
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:
- The more users come to create mind maps
- The more mind maps become public
- The more qualified SEO traffic MindMeister receives
- The more users create mind maps
What are the assets your users create that they would happily share in exchange for status, notoriety or backlinks?
2. Webinar Ninja - Viral Promotion
When using Webinar Ninja software to promote your webinar, you are by default promoting Webinar Ninja.
- Your webinar landing pages sit on their domain
- The emails sent to your registrants, come from Webinar Ninja
- Your webinar attendees experience their branding whilst watching you present
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.
- No custom domains
- No custom email servers
- No custom CSS
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.
And how is this working out for the guys at Webinar Ninja?
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 here.
Do your SaaS users have interface with other people to get value from your SaaS product… if yes, are you in the middle of that communication?
3. Wavve - Viral Freemium Model
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 @marbieskitchen
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).
Can you allow people to create and share branded things using your SaaS for free?
4. Calendly - Distinctive Design
Have you ever jumped on a live chat, filled out a survey or scheduled a meeting through some software and thought:
“Wow - that was a great experience”
Or…
“I’ve used that before…”
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.
Can you design your SaaS such that people will recognize it regardless of whether it has your logo on?
Amy sits back in her chair… and it hits her.
She finds her new SaaS businesses through their users.
In the past hour:
- Amy needs to map out a new funnel and searches Google for “funnel map example” - MindMeister User Led Growth
- Amy has to book her CEO onto a webinar with a partner, she signs him up using the link sent to her - Webinar Ninja User Led Growth
- Amy is scrolling Linkedin to review a new hire and sees a very attractive animated podcast video - Wavve User Led Growth
- Amy needs to book her whole team in for 1-1 sessions, she sends them her call booking link - Calendly 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
What did we learn?
- Enable users to make their work public
- Build features that enable users to interface with new users
- Consider freemium with branding
- Invest in distinctive, recognizable design
Which SaaS businesses do you know that enable their users to spread the word for them?
Please comment/ Tweet below with your thoughts…
Tom Hunt is the founder of SaaS Marketer and bCast (podcast hosting for marketers, by marketers). He lives and works in Hackney, London with his delightful partner Rebecca and little dog called Bear.
