Last month at Bowery’s annual Marketing Summit, we were joined by Bill Macaitis, Former CMO, CRO, & Board Advisor of Slack, and Zach Sims, Co-Founder & CEO of Codecademy, to give us “The Full Scoop on Bottoms-Up Marketing.” You can find the full video replay of their session below (or here).
Below we have summarized some of the key takeaways:
1. Freemium plans can be scary at first but can accelerate growth. With a bottoms-up marketing model, closing a large deal becomes infinitely easier with existing pockets of usage. Having a freemium model can help a company develop internal champions that can ultimately drive a sale. Both Bill and Zach are both strong believers in non-feature-driven freemium plans; they prefer to offer a free model to all consumers and focus on development for enterprise in their premium models. Bill recommends starting with a bottoms-up marketing strategy and then moving to a combination of top-down and bottoms-up.
2. In the B2B SaaS space, don’t underestimate the power of a platform that is simple and fun to use. Slack found success in generating consumer interest by creating a simple tool with fun features in terms of color schemes, loading messages, and integrations like Giphy. Given enterprise software historically has a reputation for being boring, it is important that companies implement interactive features to generate interest from end-users. It can be tempting to add dozens of features but then you end up with the “Photoshop Effect,” where you have too many edits/layers and it becomes hard to use.
3. It is critical to deliver value and charge a price based on the value delivered. In many cases, B2B SaaS companies charging too low of a price point will face challenges with establishing legitimacy. While it may seem counterintuitive, you may actually gain traction by charging more (assuming the value is there). Bill also emphasized that when it comes to adjusting pricing models, it is absolutely necessary to grandfather in existing customers. A lot of these businesses grow via word of mouth and you don’t want to lose your champions due to increased pricing.
4. Align on the right metrics and hone in on customer feedback. Bill is a big fan of NPS (net promoter scores) and comparing to benchmarks. It’s important to identify the right metrics for your business and then align the company around improving them. One key metric for Slack was daily active users, which was reflected in how teams were measured and how the product was priced (customers only paid for active seats). It’s equally important to embrace customer feedback. At Zendesk, despite adding plenty of cool, new features, the main thing people didn’t like was that the speed was too slow. Zendesk reoriented around that feedback, improved the speed of the product, and the feedback was extremely positive.
5. Find and elevate your champions. Look for people that love your product, gave you a great NPS review, or tweeted something positive about your company. Develop a relationship with them, send them some swag, get their feedback on upcoming product features, ask them to introduce you to key stakeholders internally (perhaps their procurement team, a new department head, or a new team of potential users). Use these same tactics to cultivate champions in the newly introduced departments and you’ll be set up for success to land and expand. Once the prospect sees a lot of interest and a lot of people using it internally, that’s when you bring your sales team in (combination of bottoms-up and top-down).
Bill Macaitis (left) is the former CMO, CRO, and Board Advisor of Slack. Prior to Slack, Bill was the CMO of Zendesk and SVP of Marketing at Salesforce.com. Earlier in his career, Bill was a marketing leader at Fox Interactive Media and IGN Entertainment.
Zach Sims (right) is the Co-Founder and CEO at Codecademy and a Venture Partner at Bowery Capital. Prior to Codecademy, Zach was one of the first employees at GroupMe.
If you liked “The Full Scoop on Bottoms-Up Marketing” and want to read more content from the Bowery Capital Team, check out other relevant posts from the Bowery Capital Blog.