Podcast Commentary: Rachel Hepworth – Growth at Slack on Inside Intercom
I am trying something new – writing up quick notes and commentary on a podcast episode.
For this episode it’s Rachel Hepworth from Slack on Inside Intercom. All notes were jolted town on my Evernote while riding a crowded TTC during rush hour. These are not direct quotes but a commentary on my own thoughts as I listened to the episode.
The first thing that caught my attention was the fact they call it Growth Marketing vs Growth (which can bleed heavily into the product side) or marketing or Demand Generation. The way Slack defines Growth Marketing is team acquisition. Team being an active team ( > 1 user) on Slack. The unit of value for Slack is active teams. One person on Slack is not a great experience and doesn’t lead to product stickiness.
Performance marketing, Growth & Demand Generation is used interchangeably in many discussions around marketing . As someone who’s been uneasy about how the industry definitions change every few months and more and more folks are trying to create a personal niche for themselves, this was interesting observation. Demand Generation is often seen as getting someones email // phone // name and then working them through a series of nurtures before being passed to sales for a more direct calling // emailing sequence. Slack looks at it more of a segmented approach where they determine which cohort will need more hand holding and on-boarding, especially as they move to industries outside of engineering & developer communities and early adopter groups. Think Outlook and Microsoft enterprise shops with huge IT departments and getting adoption across massive orgs.
As Slack tries to grow beyond their early adopter base, it involves alot of education and nurturing on what is Slack and what is the value of it. In this case, a home page with box to enter your email and get started doesn’t work as well. On the subject of the home page, I was surprised they don’t have a multi-variant testing infrastructure built out to test home page variations. This is something Rachel and her team are going to be focusing on in 2018, as they move to different industries, they’ll need to provide more traditional marketing copy and context for Slack to try get them to start and onboard teams. This also ties into their traditional demand generation focus in 2018 – to provide hand holding and value to potential teams on how and why to use Slack rather then having a box with an email. *the box with the team struck with me a lot*
The biggest challenge for Slack is building demand on top of a product with a super high organic growth curve. How do you take that early adopter momentum and translate that into the late adopter communities and industries where they are so entrenched in their current way of working? This made me think of the time when I tried to get the Organimi team on-board Slack – it didn’t work since everyone was more comfortable with exchanging email threads and didn’t want to break the existing workflow of communication. Slack or other tools only work if everyone is using them.
On the convergence of marketing // product – Rachel mentioned shared channels feature that Slack released. The product feature has huge potential virality as you a light weight way of introducing new users to Slack because existing teams can invite them to shared channels for collaboration. But the marketing question becomes how do we build flows to ensure the person/team being invited to a shared channel understands what it is, how it works and how it provides value. How do you take someone who joined a shared channel and get them to start their own Slack team. This is often the case with fremium models – having strong product and marketing convergence to convert someone to a paying user.
Slack is using multi touch attribution with credit for advertising impressions so they can really tie in the effectiveness of their paid media spend. This makes me think of view through conversions of Facebook but also how most of marketing these days is so tightly wound up around direct response advertising and programs that we tend to overlook the brand affinity aspect. Rachel did mention that this only works on massive budgets, so if budget is smaller , first or last touch attribution works – as long as there is some attribution in place. Slack spent a lot of time building the foundation before hand.
Key learning – spend some time building the foundational systems before hand. There’s alot of companies that attempt to build or fix the systems once they reach a certain size but it creates a ton of debt and legacy processes and data to fix.
Sales operates on a different model. Since Slack already existing user base, the sales team focuses on looking at teams with potential to be paying customers and engages with them. It’s almost NOT like a Sales team but more like a Customer Success/ Upsell team – the users are already on Slack. Its about education and upsell to paying users vs them staying on the free tier.
Right on the money here as a case for more freemium models in B2B // Enterprise Saas:
Would you rather go after somebody who’s actively using the product and you know is getting value, or somebody who downloaded a white paper and may be vaguely interested? We need to take advantage of that freemium funnel where there’s no barrier to getting in the door, and use that to help the sales team be really efficient. — Source
I am honestly surprised more enterprise // B2B companies don’t adopt the freemium // trial model. Databox has written alot about it and I am a huge user of Databox for myself and some client reporting dashboards.
But even in this case – Slacks Growth // Marketing team does not focus on retention. Their work stops when a team either upgrades via self serve or flagged as a great prospect for Sales. Surprised that they don’t have robust an account // team scoring model or even a marketing automation system in place but it is something the team is working on – combining demographic // firmographic // product usage data into a scoring model that flags teams as a good potential for upgrade to the Sales team and sending communication to the team based on score // usage // profile. Even though Rachel mentioned they are different from the typical demand process in terms of creating MQL’s – this to me was very simillar to the MQL model (call it PQL) in that marketing is qualifying teams for sales via a mix of data inputs. Side note: because starting a team is relativel friction less, Slack’s challenge is identify a good fit for a paid team subscription especially at their scale. Everyone has Slack teams for hobby groups, communities, causes etc so the numbers flowing through the funnel are really high.
Her philosophy with growth really struck with me – Only know enough to be dangerous but hire people to do their best work.
Interesting note: Look at all your growth // marketing tactics holistically vs in a silo. An example of LinkedIn’s infamous invite emails – where the email invites by hijacking email address books would show great top of line growth but as a user – getting bombarded with emails isn’t a good experience. Key learning for me – look at the entire lifecycle and audit all the comms – but if you need to push the limits, do so with knowledge that your experience might not be great.
If you haven’t done so – listen to the entire episode below: