Freshchat’s 2018 marketing misfires: A case against red buttons, growth hacking, and YouTube ads
Working for a unicorn startup comes with amazing advantages. You can build things that you know are going to multiply in value down the road, which gives you the confidence to do great things. After all, you have all the resources at your behest to make things work. The only caveat is—there is no time to lose.
“Fail fast,” echoes the voice of your startup sensei in your head, “even if that means losing a few bucks here and there.” Failing is fine as long as the cost of learning is worth the money you lose.
Freshchat has gone through a similar joyride over the past year. Since its inception in the Q3 of 2017, we have grown bigger in our revenue books, team size, and production. We have taken some crazy good turns that wouldn’t have been possible had it not been for the constantly-moving goal posts we set for ourselves.
And we have learned along the way. The marketing team has especially taken some hits from our recent past. For instance, we thought that hiring a copywriting agency to supplement our content marketing would help us double our strength and give us a boost in our SEO ranking. Not true. Outsourcing your content marketing is a tough nut to crack. It’s a huge nanny-work and an editorial liability that keeps you away from doing more important things. Most importantly, content is the voice of your brand that freelancers can’t emulate—even when they run up the bill by hundreds of dollars.
There are other marketing experiments that didn’t work well as much as we expected them to. Most of them were based on what is most talked-about in the industry and how the market has been said to react.
In business, when things work out for you, you document them as “best practices”. We have done that a few times previously, like the time when we hacked events to get a 90% response rate. But when your ideas tank, they cost you time and money; they are not worth your time in the future.
I believe that, as marketers, our job is not just to sell products. Make no mistake, marketing is about telling stories that others will find interesting. The learnings that we have taken from our marketing mistakes in the past year also merit a detailed cataloging, which I think will help us, and other marketers, avoid costly mistakes in the future.
The hot-button experiment
Somewhere in mid-April this year, we decided to test a hypothesis despite the vehement protest of our website UI designer. We set a new goal for ourselves to improve our monthly user sign-ups and we wanted to try a few things to see this through.
We took a thorough stock of our marketing collaterals to see if we could improve the messaging and attract more new leads into signing up for free trials and product demos. We made a few revisions to our marketing copies everywhere, made three new landing pages live, and green-lighted two great sales enablement documents.
In one of our weekly stand-ups, we came up with a few more ideas to try but shot most of them down because they didn’t carry enough data for us to trust. One of the ideas that stood out was to change the color of our call-to-action (CTA) buttons from blue to a hot red across all pages. The theory was that changing the plain-vanilla, powder-blue button color to something more distinguishable (orange and green were close contenders to red) is likely to change the user behavior in our favor.
The topic of which-button-color-will-get-more-hits is a widely debated discourse in the online marketing circles. Many marketers endorse the use of big, flashy buttons in order to increase click rates.
The marketers at Moz in the past have propagated that the combination of blue and yellow in a home page is an advantage. Neil Patel suggests experimenting their button with color because it “…changes how we perceive brands” and contradicts the idea in one of his other posts by saying, “it doesn’t matter”. Acuity Scheduling, an online scheduling tool, claim that they witnessed a 94% increase on their homepage ‘Try It Now’ button clicks by changing its color to red.
Like good marketers driven by the noble cause to increase our sign-ups, we decided to try it out. There was at least one voice of dissent against this idea. Our UI designer, Karthikeyan, said changing the button color to red would look “messed up”. But the majority of people in the room pressed on and decided to A/B test it. We A/B tested the button colors of our well-performing landing pages to a bright red, pitch black, and our regular blue and showed each variation to 33% of our audience in our biggest geo.
Here are the three button variations that we created to test our audience behavior:
“Soon”, most of us thought, “we will witness chart-topping sign-ups.”
After running the experiment for a while, we circled back again to see what impact it made. We only saw a 0.4% increase in sign-ups in the new color, which was almost in the same range as before and not justifiable enough for us to experiment any further with another ostentatious color. Having a product like Freshmarketer—CRO tool from Freshworks—in our arsenal helped us to fail-fast.
We followed this by reverting to the button color that aligned with our brand logo and sits well with the rest of Freshchat’s theme.
Here’s how our UI Designer, Karthikeyan, reacted to the reversal.
We will still spend on podcast ads, but…
Last July, we got on the podcast bandwagon by introducing Mind The Gap, a show on growth, marketing, and customer experience. We invite experts from various business backgrounds on the show and talk to them primarily about how to identify the common business gaps and ways to overcome them.
We have aired episodes with experts ranging from customer onboarding champions to content marketing vanguards and AI torchbearers. We let our audience record questions for upcoming guests which make the format of Mind The Gap very interactive. We ran a few ads with Outcast to spread the word about Mind The Gap in relevant podcast circles and it worked wonders for us. Listeners probably love the show, which shows in the growing number of our subscribers.
However, we didn’t enjoy the same kind of success for the ads we ran for our product sign-up. Let me explain.
Podcasting in the U.S. touched a $314 million revenue in 2017, almost tripling from $169 million in 2016. It’s no news that podcasts can help B2B companies improve their branding, build stronger ties with the market, and create better brand journalism opportunities. We wanted to market Freshchat to our target audience on relevant shows in the podcast world, but we found ourselves in a strange fix. We lacked experience in the booming audio content domain that measured success somewhat differently (e.g., in CPMs and not CPIs).
Therefore, we went to a podcast consolidator, a third-party group who help you get a curated list of possible podcasts related to your interests. Marketers familiar with the podcast world understand how this works; you pay a straight upfront fee to a seasoned consolidator who will give you a set of relevant podcasts for you to choose from. They will keep their markup, pay the podcast owners their individual share, and broadcast your ads across these shows. It’s a fair deal, except that they make the initial discovery of which platforms are best for you.
There were two major problems with this approach. First—while we believe it did help us get product visibility, we didn’t get a satisfactory number of product sign-ups from the ads. When we communicated this to the consolidator agency, they gave our feedback to the podcast host who made a few changes to the ad content and their airtime. That gave us better results, but it took longer for us to pass the message through the consolidator.
Second, this was a more expensive path compared to if we had invested our time in finding the right podcast stations to advertise on our own. And even if we discount the cost part out of this, we think we could have found better podcasts to advertise Freshchat on than the media-buying agency who tried their best to help us.
Of course, podcast ads are great and I strongly recommend every B2B brand to try it. We will still invest in podcast ads, but this time around, we will choose where the ads go instead of working with an aggregator who will place our ads.
Now, the course correction for us is to spend some time researching the right mix of podcasts rather than settling with an intermediary to do the job for us. It will also help us build relationships with podcast hosts and give them direct feedback instead of going through layers of middlemen.
Paid is nice, but organic juice is healthier
Let me elaborate this point by saying that the growth hacker in our team recently gave up his official title and rebranded his résumé as a growth marketer. Growth hacking is the instant gratification of the marketing world—the supernova that gives you a short burst of quick results and dies down as quickly.
Many marketing teams become inclined to apply this unconventional way of growth hacking because it comes at a relatively cheap price tag (sometimes even free). If you have used growth hacking as a strategy to generate more leads or increase the web traffic to your blog site, you would know that it’s a juvenile approach to get things done. It can end up giving you wrong results or, worse, you will have to fight the backfire it creates.
We tried the growth hacking approach to increase our sign-ups that did little to streamline our funnel. One of the many things we did was we targeted Twitter users who follow businesses, topics, and influencers that we wish to target and then pushed our ads to them on Facebook. There are several tools such as Phantombuster and Data Miner that can help you pull this hack.
Initially we felt euphoric. Isn’t it bloody brilliant to find the audience on Twitter, get to know what they talk about, build specific ads for them on Facebook, and make your money work better?
But here’s the thing; we got a ton of unqualified leads because we didn’t evaluate the gap between the goal we had and the road we took to achieve it. Growth hacking is a risky territory that might burn your fingers if you don’t pull it off well.
But hold on, if you are thinking I’m writing off growth hacks as an ineffective marketing strategy, let me clarify—that’s not what I mean. Growth hacking has definitely worked for big businesses such as Dropbox, Facebook, Airbnb who got stupendous results by hacking their marketing efforts. Growth hacking works like a charm when you are applying it as a supplementary tactic within a broader scale of your inbound marketing activities.
For example, if you are seeing an uptick of engagement for your blog posts on Facebook and Twitter, you can 10X the engagement by using growth hacking.Growth hacking works best when it’s used as a fuel to flame the fire that is already burning bright, not to start a fire from scratch. Click To Tweet
In contrast, you should look at growth marketing as a more sustainable approach to grow your business organically. Growth marketing is a more reliable and scalable marketing strategy which will give you long-lasting results, although it might take time to get there. As an example, we got featured in Product Hunt right after our launch last year and it still gives us a steady stream of healthy sign-ups. Our website pages also rank better in search engine pages organically because of the efforts we have taken to write quality content.
Note to self: Forget the hacks; be a better marketer.
YouTube is great for ads, but bad for conversions
With people watching 50% more video on YouTube than ever before, there is no doubt that video is quickly becoming the next big content trend. Facebook, a close second to YouTube, is witnessing an increase in its daily watch-time while other big players like Snapchat and Twitter are also riding the wave of video content at a breakneck speed.
A June report from Vidyard shows that there has been an 83% year-on-year increase in video production among B2B companies in the past one year. With video platforms like Wistia, Brightcove, and Hippo Video in the fray, the future of brand marketing looks very striking.
Clearly, video is winning the content game because digesting information from a video is much easier and much more gratifying than gleaning information out of a 1500-world-long blog post. We might be headed towards a future where we will have less marketing content to consume and more auto-playing videos beckoning our attention.
However, our early experience with YouTube ads was a little disappointing because it didn’t lead us to the goals we had set for ourselves. We spent quite some money to advertise Freshchat on YouTube. In return, we had to scrap the bottom of the YouTube barrel to get sign-ups from those ads. The returns from the YouTube ads didn’t justify our investment.
YouTube is definitely a great place for brand advertising and social engagement, but the video platform is not-so-great for setting sign-ups as a metric. We tweaked the goal and is now doing some wonders. We plan to go ballistic about promoting our brand on YouTube, but this time, for a whole different set of goals.
Factor in hiring when you are scaling up
As one of the fastest growing product within the Freshworks ecosystem, we factored in growth on the product development, sales, and support, but we didn’t expect the explosive growth we achieved in a short span of time. Of course, when you triple in team size within the first year of your launch, you are bound to have some blind spots along the way. But I think hiring errors are more critical to your business than others because it can metastasize to other aspects of your growth.
Molly Graham, in her recently published article about the hiring mistakes that scaling startups do, says, “Hiring is a network effect. The first 100 people you hire will define the next 200.”
Oh, and we did hire the best folks when we launched the product. That was not the problem. The problem was when we were scaling we created new positions in a reactive approach. We have an extremely committed, focused and passionate team. But we miscalculated our potential to grow and realign our team as the team grows.
When you grow by 4X, the marketing, sales, engineering, and product team needs to factor in the growth and align accordingly. In retrospect, we could have taken a stock of hiring at shorter intervals and aligned people accordingly.
At scale, the problems you try to solve are very different—more types of frustrations to manage as more processes come in. You will have more battles to pick up. Your teams can tire out if they don’t have the right mindset. You also need to bring in managers who can coach them and create the right mindset for that phase. Ideally, you need people who have gone through that phase before.
When we launched the product we had close to ~30 members in the team and now we currently have close to 100 people. Freshchat as a product will close the year at 4X the target we set out to achieve when we launched. This growth will come with its own share of problems—problems of scale and managing it. It’s a good problem to solve, of course.
Focus more on tracking more than ranking
After a year after our launch, organic still remains Freshchat’s #1 source of acquisition and sales. As an example, we moved 10-points up in Google’s search engine results page (SERP) for several of the high volume keywords relevant for our product because we sharpened our top-of-the-funnel (TOFU) marketing.
This gave us a good brand visibility alongside our fiercest rivals, more traffic on our website, and a lot of sign-ups. Therefore, it would be fair to say that in a matter of months after we launched, we killed the organic marketing front.
But what we didn’t do was we didn’t track and manage the conversions that well. This, in my opinion, is a common problem that many businesses have. They first publish great quality content, improve their TOFU ranking, manage to get people on their websites, and then sit on their laurels celebrating their rankings. But it all fails if your visibility or sign-up is high but doesn’t translate into conversions.
In our case, we didn’t run an awful lot of experiments to track and understand our conversion trends. We didn’t exploit the potential of our brethren product, Freshmarketer, to increase our conversion rate optimization (CRO). Because we achieved more or less the same results we were expecting in terms of ranking and traffic, we didn’t challenge ourselves enough to understand if there was a better way to hone our CRO.
In essence, that’s what testing in marketing is all about. For example, running an A/B Test is splitting your brand personality into two and understanding what resonates most with your potential customers. You write two versions of a landing page and test it with the same or multiple groups of people to see which one gets most hits.
Future note to ourselves: rather than just being obsessed with ranking, run more tests, track sign-ups trends, and improve conversions.
Outsourcing can be a pain in the neck
When I joined Freshchat in February, our content marketing was in a disarray because there was no one specific to look after it. For the next seven months, I held the content fort with the occasional help of other team members. But while we were focused on writing guest posts and other articles that required an insider’s perspective, we didn’t want to lose out on the SEO front.
In one of my past jobs, I had a good experience of hiring freelancers from Upwork to write quality articles for us. Therefore, we decided to outsource a part of our content marketing to an agency this time to amplify our organic marketing. We went to great lengths to make it happen. For instance, we hired a freelancer to write articles for us, paid a bomb to an influencer to author thought leadership pieces, and signed a contract with an agency to help us align our SEO content strategy.
But despite the best intentions of the people we partnered with, we didn’t meet the results we had envisioned. In my experience, we did everything right; pumped money into the project, recruited the right people in their specific fields of expertise, and communicated clearly and constantly about what we wanted.
We pulled the plug when the partnership with the said vendors started to feel like a liability than an advantage. We had to spend a lot of time going back and forth reiterating the project details, delay important deadlines further to make our partnership work, and review their work constantly. It distracted our team from doing more important work as it became a burden that dragged down our team’s KPI.
We now believe that no matter how great the offshore hiring is, they will not be able to share the vision and mission that you have for your product. Like how hired mercenaries don’t care about the cause of a war beyond the warfare, freelancers and consultants are not excited about your product for the same reasons you are.
We should have focused on producing lesser, but more meaningful content than trying to do things with the agency and freelancer. Marketing a young product requires you to take baby steps until you grow to a point where you can sprint at lengths or set your own intensity.
Of course, outsourcing is handy when you are stretched out for time or budget—which we thought was the case for us. But we were not short of expertise, we just doubted our own capabilities because we saw bigger potential in outside experts. This doesn’t mean we are writing off outsourcing as an option entirely; we look forward to working closely with influencers or partnering with brand evangelists on affiliate marketing programs. But given our recent experience, it will be foolish for us to expect 5X results.
For now, we are driving all of our content marketing strategies ourselves because it communicates our brand voice and personality.
We are learning by doing
When it comes to business in general, data is the leveller that settles all disputes. It’s easy for marketers to get carried away with ideas and overlook insights for the sake of instincts. And that’s where most of our mistakes were made; we tested a bunch of hypothesis based on hearsay or our collective gut. We tried things because it made sense to us, but we didn’t have enough concrete data to substantiate.
However, we are lucky to have made these mistakes early on in our growth. I think it’s an advantage to get to measure the early impacts of mistakes optimize your strategies for better results on time.
In many ways, marketing resembles science and experiments to create innovation; therefore, you can’t risk data to go with your guts. Like a series of lab experiments, these learnings have given us an understanding of what we need to sidestep, where we need to improve on, and the things we need to continue doing.
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