Founder and CEO
This is a session that I've been so excited about just doing and having a fireside chat because this is one of the role models that was we created benchmark at the company. Patrick Campbell, who was a founder and CEO of ProfitWell, now part of Paddle, was a benchmark for me about how to build a company with a media-led growth component. So Patrick, welcome to SaaS Metrics Palooza 23. Well, thank you, Ray. That was a great... I didn't know exactly that, so that hit my heart. So hopefully I can live up to it here and get you some good thoughts for the audience. No, I hate to be a fanboy here at a conference, right? But I started consuming your content probably four or five years ago. And I'm like, wow, if I could do something like this, I'd be really, really proud. So, but let's start with that because maybe some people at SaaS Metrics Palooza don't know about ProfitWell and your own journey. So give us a little background on your personal journey, which by the way, is very unique before you entered the B2B SaaS world. And just a little bit about your journey at ProfitWell from a high level. Yeah, totally. So Patrick Campbell, I actually never wanted to get into business. I wasn't the kid who grew up and was like, I want to start a business. Let me go get my business degree or anything like that. I come from a union, blue collar family. So management and business was the devil. So I've definitely not made my parents proud with my life choices here. But I grew up in Wisconsin and then went and worked for the government. I worked in the intelligence community as an intel analyst and ended up at Google in Boston. And that was kind of my first foray into the world of tech and business. And then kind of found at both those jobs that I was one of those guys who did not like to work for somebody else for good and bad reasons. And so jumped out and kind of started my own company about 10 years ago. And it was called ProfitWell. The first iteration of the name was Price Intelligently. But basically what we do and did is we essentially help subscription companies grow automatically. So we have this product called ProfitWell Metrics, now called Paddle Metrics. I'll explain why in a second. And that product gives you all of your MRR, all of your churn data, all of your financial metrics completely for free. You just plug in Stripe, Zora, Paddle, Chargebee, whatever you're using. And then we made money by taking and studying that data and then using that data to train our algorithms for our paid products, which helped you optimize your pricing or optimize your cancellations and your churn. We were bootstrapped, which was a fun thing, but we weren't necessarily one of those VCs suck. That was actually a big mistake, I think, in kind of hindsight. But last year, the year before, we basically sold to a company called Paddle, which is a billing merchant of record. And we kind of integrated the products. And now our mission is expanded from help subscription companies grow automatically to help them operate and grow automatically, which is pretty exciting. And I think that's where a lot of B2B software is going to go in the future. So that's the rambly version of my last 30-some years here. Very good. You did it in two minutes or less. That's really good. But I wanted to center and anchor this conversation about something that you did that I think really helped propel ProfitWell to broader brand awareness. And that was your media-led growth strategy. I'm calling it media-led growth. But you and I have talked before. Over the last five, seven years, with all the venture capital that has went into the industry, a lot of noise, customer acquisition costs went up, employee engagement is managed by retention or attrition. You know, it was much harder. And it was just hard to cut through all the noise and the clutter. And I think that's one of the reasons why you kind of launched into a non-traditional brand media building inside a B2B SaaS company. So can you tell a little about what started this brand media asset building journey? So if you take a really big step back, our market has completely changed, but the way that we grow hasn't. And that has terrible implications on not only the overall growth of every company that's, you know, of every person that's watching this, but also in how we grow into the future. Let me explain, you know, such a claim a little bit. So you mentioned this a little bit, but over the past decade, we've gone from a market of the hardest thing to do as a company, especially a software company, was basically to create the product, right? So everything that we focused on in the past 15, 20 years in our industry was how do we ship stuff faster, right? DevOps became a thing. Tech ops became a thing. Engineer and dev productivity became a thing. Everything was about how do we ship, because that was the biggest barrier. And we didn't have these barriers around growth, because there weren't a lot of companies relative in the market. And you had these brand new marketing channels that were opening pretty consistently, right? So some of you, you know, some of the old timers in the audience here, you might remember Google ads for a penny a click. You might remember being the first one to advertise on Facebook. And if you look at all of the growth kind of literature, all the marketing and sales literature out there, it was all about being first to these new channels. Well, we ran into a problem in 2015. And the problem that we as an industry ran into was we stopped getting new marketing channels. We stopped getting, you know, all of these new, you know, places to actually go and find customers. And the result of that was Snapchat was the last big marketing channel we got in 2015. And a lot of you on this particular conference, that's not applicable at all. And now we have TikTok, but that's still not as applicable to B2B. And now all of us started kind of flooding these channels. But then another problem actually occurred where we started flooding these channels and then it got easier and easier to actually build a company. So everyone and their mother now can spin up a server, launch a website, start driving traffic to that website. So you have this two-prong problem of not new marketing channels opening up. So all of a sudden, everything there is getting more expensive. And then there's all these companies coming on board that might not necessarily be competitors, but they're still trying to take oxygen from your potential customer for their particular product. So you just have this density that occurred. And for us as an individual company, especially a bootstrap company, when we looked at this situation, we started noticing in the data that, you know, CAC, for example, and, you know, we were, you know, in a privileged position to have access to tens of thousands of companies' financial data that we could study in aggregate. CAC was up about 120% over the past decade. If you're an enterprise company, it's up actually over 200%. If you're a sales-orientated company, you're up about 180%. And we as companies just continue to dump more and more money into the top of the funnel, as well as in the bottom of the funnel. So sales, as well as like ads and events and getting people, you know, to basically notice us. And when we looked at this, we started thinking about, well, if all of the KPIs for all companies are basically diminishing or becoming, you know, very kind of linear in terms of the growth that you're going to get out of it, we need to do those things. Like everyone needs inside sales. Everyone needs, you know, good top of the funnel. But if that's happening, what if we went into this middle of the funnel and created this pool of leads that we could essentially go after and kind of hold on to until they were ready to buy? Because so much of sales now is about timing in this kind of new market where prospects have so much power. And so the long and short of that was, well, there's two ways to create pools of people who are aware of you and you don't have to fight to put ads in front of them every single quarter. The first one's freemium or product-led growth. That's like the hot way to call it. And so we had that already with our free product. And the second way was content that wasn't just focused on getting you from the top of the funnel to the bottom, aka downloading an ebook, but content that actually kept you in this middle of the funnel so that we could prod you every single quarter, every single month in order to maybe get on a sales call. But if you didn't want to, you still were very, very much nurtured. And this is what the media play, as you kind of talked about, really was for. And so the result of that, to make that more specific, is we launched a series of different podcasts and video series. One of them was called Pricing Page Teardown, where every single week we would, you know, look at a pricing page. Obviously, this is really relevant to our paid pricing product. And we would basically say, they're doing this great. They're doing this not so great. Here's what they should do. And then we'd launch that every single week. And that series had tens of thousands of people watching it every single week. Then we added, you know, more of like a generic podcast, which was, you know, kind of an interview show. We added a show called Boxed Out, which was, you know, looking at basically tearing down the cancellation flows for different DTC and consumer companies, which is one of our customer bases. But the whole idea here was, I want to keep customers or potential customers in that middle of the funnel, really aware of who I am. So that when the timing comes where they need my product or they're thinking about the problem they have, we're the first natural, like, company or the first natural product that they actually think of. And this is what led to that media play. And frankly, and, you know, I'm sure we'll get into this, all of our unit economics were just infinitely better because we not only were getting better and better at those ends, the top of the funnel and the bottom of the funnel, our sales, but we were also creating this pool in the middle that allowed those customers to really come in in a really, really cheap way because they already were aware of us. There's a lot in there. So let's double click, because when you are in an event, which is all about metrics, right? Especially with a lot of CFOs and COs, we're going to be thinking about conversion rates, cost per lead, cost per opportunity, cost per dollar of new PR. And, you know, a lot of these media things, right? It's a little more subtle, right? So how did you actually measure the efficacy and the efficiency of this media production spend? Because it couldn't have been number of leads at top of the funnel, right? On a monthly, quarterly basis. Well, it sort of, it could be. So what I mean by that is like, so first we got to take a step back because I think most companies do metrics theater or kind of, you know, especially when it comes to marketing attribution. It is rare that I see a company that is doing really, really well at full funnel kind of attribution modeling or just really understanding their unit economics in general. Like just imagine your board deck. Like I can guarantee that half of the people watching this who have boards and need a board deck, I guarantee that that particular board deck is haphazardly done and just kind of like reactionarily done the couple of weeks before the board meeting. Rather than like having a system where it's like, let's just click the button or let's just copy and paste the new data and all of a sudden the slides auto update and we've already tracked all the potholes, right? So, you know, a little bit of a side note there on like the state of companies. But I think that the reason I bring that up is because when I hear something like, well, does this like make money? Like, yes, we need to do some tracking, but let's not use that question as, and you weren't doing this, but I know people do this inside companies. Let's not use that question to, you know, pooh-pooh an idea before actually understanding where the impact is. And this is also me defending a lot of CMOs and VPs of marketing who wanna like go in on more brand and wanna go in on more kind of this type of marketing, but they struggle with a CFO or a head of sales or a CEO who like uses that question basically as a way to deter any ideas. So yeah, that's my little soapbox for a moment. But here's the thing. Whenever you're thinking about strategy, right? And strategy is this fun word that's really ill-defined. Really what you're trying to do is you're trying to find a way that you're going to win and a place that you're going to play in, right? So how are you gonna win? And, you know, what's gonna differentiate from the market and where you're going to play, right? So for some companies listening to this, a media strategy doesn't make any sense because you can get really, really good conversions based on just regular advertising, regular media buying, et cetera. You don't need brand marketing or media type marketing. But for a lot of you, if brand is something that actually moves the needle and it's something that a lot of people don't measure, but they think of word of mouth maybe as well, that's basically brand. A lot of you don't necessarily have enough customers, like enough logos in your industry for you not to have a brand play. So think about our industry, the subscription market, any company that has a subscription. There's only about 150,000 of those particular companies that exist. So for us, doing sales and doing a bunch of ads isn't going to necessarily move the needle towards hyper growth. So we need people to be aware of us. So brand was something that was gonna be really, really, really important. So from a first principles perspective, we basically were like, okay, well, brand's important. What's the best way to get brand? Well, content, right? You're not gonna like just go and buy a Super Bowl ad, especially in our particular market. And that's not even gonna work unless people are constantly aware of you when it comes to actually brand and actually like publishing content. So that's the strategy, right? So first principles, from a first principles perspective, media makes a lot of sense. Well, then comes the data that you're asking for. Does it work and how does it work? Well, what we first started doing was we started looking for anecdotal data and we hedged the idea by basically saying, here's a content marketer. They cost just as much as a video producer. We're gonna hire one video producer and we're gonna hedge the actual like experiment of doing media marketing with that one headcount, right? Cause we were already gonna hire the content writer. We're just gonna hire this person instead. Then it became about producing video. We started with video for a whole host of reasons. And what ended up happening is, is we were basically like, let's start looking for anecdotal evidence cause let's just start publishing stuff and we'll find the anecdotal evidence. And the initial anecdotal evidence was we started getting more engagement. So this was not only anecdotal, but there was also some data from this where we would publish something, almost the exact same thing with a video would get infinitely more engagement, more people sharing, more people commenting on LinkedIn, all kinds of stuff. So then that was the initial data where we're like, okay, this makes some sense. Let's go even further. And without going through every single iteration, the next phase was, let's start measuring the top and the bottom of this experiment. And what I mean by that is, how many people are seeing videos? How many dollars are basically coming from people who have seen videos or seen content? So not super, super deep, but we were basically looking at the black box was in the middle. We didn't know what videos, what was working necessarily, but we basically looked at, is this working? And we were able to look at our pipeline as well as our actual sales and notice how many touches of our content actually took place with them. And it's a bit of a chicken or the egg because you're obviously sending them the content, but that's okay, right? We were okay with that little bit of a chicken or the egg. And then the next iteration of this was basically starting to look at, on a show by show and an episode by episode basis, where conversions were coming from, what was working? And that allowed us to kill certain shows and kill certain content, go out and create some more content by treating it basically like a product. And ultimately, to maybe give you some TLDR numbers, what we're able to see is, not only was our word of mouth growing, probably about 20% quarter over quarter for multiple years, which is a pretty significant increase, but also our CAC was basically coming down for those folks who came in through our actual content versus those who came in maybe through cold outbound or some other places that we had. And so that CAC was reduced pretty significantly. It was different depending on when you actually measure that particular number, but that's where it was really, really significant when it came to those actually benchmarks and why we continue to do this strategy. And that's why it worked so well. So ultimately, you measured it through CAC efficiency, right? Because you saw that middle of the funnel was closing quicker, higher ACV, higher win rates, et cetera. But you mentioned word of mouth. It was increasing 20% period over period. How did you measure what was coming from word of mouth, Patrick? Yeah, so going back to my rant about measuring things, notice there's a nerve that you're touching just by the nature of this conference, the name of it, as well as the topic areas. So you can measure basically anything, but the confidence you have in that measure isn't necessarily always going to be 100%, right? So word of mouth, the easiest way to measure it is to take your traffic or leads or whatever it is, attribute everything that you can attribute. You know, this came in through search, this came in through sales, whatever it is. And it's not always perfect, right? Because you have first touch versus last touch, especially with a lot of B2B SaaS companies where you're gonna have multiple touches. Some of those touches are gonna be three months later, six months later, et cetera. But the basic idea is, is I can take everything that's attributed and then everything I can't attribute minus maybe a little bit of margin, that's my word of mouth. Like all that direct traffic that's coming, that's my word of mouth, right? Because where else is it coming from? Now there is some measurement error there, but one of the biggest issues I see with a lot of executives is they go, well, if I can't measure it perfectly, I'm not gonna measure it, which is like the dumbest thing that you could say, because there's so many things that are almost impossible to measure, even if you have all of these different tools. You wanna be as good as you can and then understand the limits of your data. So if I look and I measure that consistently on a monthly basis or a quarterly basis, I can see how that grows or that doesn't. And then maybe three months from now, I discover, oh, this traffic I couldn't attribute before that's direct, that traffic is actually this new pixel that we installed that we haven't looked at it. Great, let's go rerun the numbers. Now I can see how did my word of mouth go? And then over months, if not a year, you all of a sudden get a really good attribution model that starts to cook there. And then you can constantly improve it. And so for us, that's kind of how we measured it. There's a really good article that Reforge, which is a growth, kind of like a growth content, product and course company, they published on measuring word of mouth that goes even deeper than I just described. But that was the basic idea without showing you a bunch of graphs and things like that. You know, once again, I love to go as granular as possible, right? But I even have looked at it at my marketing CAC ratio. So I look at how much money I'm investing overall in marketing, right? And of course you could do a bi-channel program. And it's like over six to 12 months, I saw my cost per dollar of qualified pipeline and my cost per dollar of new AR go down as we were incrementing the investment in content led programs. So that's one of the ways I did it without attribution, just overall pipeline generation and new AR efficacy. Yeah, that's great. I think the big thing for anyone watching this to take away in all of the like minutiae and tangents that, you know, I mostly drove us to in the past like 10, 15 minutes, brand is everything. And I know that you've heard that before from, you know, some keynote that you've watched, maybe at a TED conference or something like that. And you kind of were like, this feels fluffy and so I'm gonna ignore it. And that's coming from like a guy whose background is in econometrics and math. So I understand how fluffy the thing that I just said was. But when you think about channels, there are only so many channels that can grow quote unquote exponentially, or sorry, grow quote unquote infinitely, right? Theoretically, ads can grow infinitely, like you won't go actually infinite because eventually it won't make sense from an efficiency standpoint. Theoretically, sales can grow, you know, somewhat infinitely, you know, as you add more salespeople. But of those particular channels that do grow infinitely quote unquote, the only one that can actually grow somewhat exponentially is word of mouth and is your brand. And that's the thing where so many companies don't invest in brand because it feels fluffy, it feels completely immeasurable. And in some ways it is, but it's no less measurable than a lot of your other channels. And it just needs to have some work and some massaging to do that measurement in order to see where the results actually come from. And that just comes down to discipline. But I have found that most organizations that already have that discipline, this isn't a barrier. Most of the time, everything I'm saying is a barrier because the company doesn't even have the discipline in the first place to do those measurements. Yeah, I'm gonna go just a little tangential on you because when you have all these media led assets and brand assets, right? You're increasing your audience and you're looking at the engagement of the audience. But now everyone's talking about community. And to me, one of the key differences between audience and community is community often is a known entity, right? They provided maybe some of their PII information and you know, they keep coming back to consume more content or interact. So my question is, audience versus community, is there a differentiation? And does it matter if you're building your media and content strategy? Yeah, so for what it's worth, I've never really thought of it that way, but I like thinking of it that way. So that's good. So I think given how you framed those two, I would say there is a difference and it is an important difference. And I don't necessarily have a framework on this, but here's something I will say of why it does matter that those are a bit different. Every company here will have these diehards that consume every single piece of content, show up for every talk, listen to every podcast. Even if you have one podcast or eight podcasts, we had these people who would just consume everything and they'd be like, oh, where's more? And then you start to see these really interesting, anecdotal situations where they comment on the third season of a show on an episode and they're like, oh, well, you talked about that in episode six of the first season, right? And they know that they're seasons, right? A lot of B2B folks are out consuming the content like a Netflix show, right? So they're aware that there's a season and they're commenting on it. And then you say something and they're like, well, you said this other thing over here. How did those two? Those are the diehards, right? And that's where even if you don't have this community-led growth concept that a lot of people are kind of thinking about right now, you wanna take advantage of those diehards. And what's really interesting about those diehards, part of them will never pay you a dollar. They will never pay you anything because there's some manager at some big corporation or there's some startup that just likes your content and they just can't afford to pay you anything. But those people are still really, really useful. We use those folks to amplify every product launch. We use those folks to amplify every major kind of content launch we had. The entire focus was we have all this energy with these people. Let's like figure out how we can use it. And they would do these things like just, they would love to do these things because they love how much they've learned from you and they love how much like you've actually helped them. And so you simply asking for them to comment on a post, share a post, upvote something if you're launching on product time was actually a really, really big deal. And then there's another part of these diehards that are your customers. And those folks were amazing for case studies and all kinds of other things and also obviously selling more stuff too. So I do think that there's a distinction because when I hear those words, your audience, a lot of your audience is just passively looking at things. You're trying to get them to actively get on the phone with you, but your community, those folks are where you have some sort of give and take, whether it's an actual give and take of conversation or it's a give and take of, hey, we gave you a bunch of this content. Could you please do this thing for us that's gonna actually help us grow as a company? And that's the big distinction of when you go from audience to community. But I would suggest unless you have like a natural community aspect to your product. So like a lot of technical products, especially open source products, you just naturally have community elements to it because other products that are even non-competitive but are using similar models have those types of community aspects. If you don't have that naturally, I would always start with audience because audience creates community. It's really hard to go from community to audience given how you've defined those terms. Well, our session's almost coming to an end. I should have done this as a double feature for two sessions, but- Or I should have been less long-winded is what you're trying to say, so yeah. Not at all. So as I mentioned, our audience, a lot of heads of finance, CEOs, about 20% go to market executives, but if they're thinking about their 2024 plan, it's like, I really wanna have more media in my marketing mix. I wanna try to build that middle of the funnel audience slash community. What's two or three pieces of advice from your own experience and journey that you would give them as they think about increasing the investment in media and brand? Okay, good question. If you are thinking of media, the first thing that you should do is make sure your other channels are in a good place. And I know that's a little counterintuitive to some of the things that we just talked about, but I do see that there are some companies that jump into doing podcasts and content and all this other stuff where their sales teams are terrible. They're really inefficient, and there's a lot of low-hanging fruit to attack there. And also, they don't have any way to build demand in general. And so, you wanna take care of your river of leads and your river of pipeline first, and just make sure that's in a good place. It doesn't need to be perfect, but you have the right leadership in those positions. You're seeing improvements on a quarter-over-quarter or a month-over-month basis, depending on how you're measuring things, because you wanna kind of... I guess another way to put it is, if you're a B2B SaaS company, which a lot of folks are that are looking at this, it's like every single successful B2B SaaS company who uses sales has figured out inside sales. So, you will be able to figure out inside sales too, right? That's something that gave us solace when we started our sales. We're like, well, everyone's figured this out at some point in their journey, so we will figure it out. So, let's hunker down and figure it out. So, make sure your flank is basically protected because you don't wanna add leads to a really crappy kind of funnel already. I think at that point, then you have to commit to the strategy because I see a lot of companies, a lot of marketing teams, they fight for just getting a podcast. And the problem with that is you end up having a marketing team that just uses that content in a traditional inbound marketing way. And it's like, cool, well, we have to publish a blog post each week. We don't have the blog post this week. Let's just send an episode of the podcast. And you end up trying something, but actually failing because that's not really what audience building is. Audience building isn't just adding multimedia to your traditional content. Audience building is actually building an audience, right? Like getting people to want to tune in to the show every single week, bringing them forward, getting feedback. It's almost like product. And I would say it is actually product. So, you have to commit to the strategy. Now, that might mean starting with one show, right? Which is probably the best idea. And if you don't necessarily have a charismatic exec or person who wants to do it, easiest thing to do is start with audio podcast, right? And something that's a little more scripted, right? It doesn't have to be necessarily something that's off the cuff because not everyone's really, really good at that. And there's a lot of people who think they're good at that, that aren't actually good at that. And so, I think it's one of those things that you have to commit to the strategy. And really what that means is you're treating your inbound marketing, your SEO, your offers, your guides, all that kind of stuff. You're treating that differently than your audience building, your podcasts, your shows, whatever it ends up being, et cetera. So, commit to the strategy. And then I think the third thing, which is I find myself kind of summarizing some of the things I've already said, is find a way to measure and get the measurement of success to just be incrementally better every single month or every single quarter if you're moving a little bit slower. You're probably not going to ever get it to be as perfectly measured as maybe search or paid ads. But even then, you're still going to be able to see the success. And there will always be a little bit of a like, well, I see it works. The numbers on the first wave and then the actual revenue that we have of people who have touched content, I can see those two things. But I can't perfectly see what's happening in the middle, but it seems to be working. And that should be good enough to continue going because it'll continue to improve over time. So, those are the three things that I would do. First, don't do it until your stuff's taken care of. Second, make sure you commit to the strategy. And then finally, like get your measurement to be better every single quarter because there will be a point where you're sitting there and you're like, oh, we have four people doing this full time. Is it worth it? Well, if your measurement isn't great, you get caught in terrible measure conversation of like, well, I don't know. And then it's whoever has the highest seniority or whoever like has the loudest argument ends up winning versus like what the truth actually is. Patrick, that was a great way to summarize and finish this session. Thank you so much for being here with me at SaaS Metrics Palooza 23. And to our listening audience, hopefully you can go and follow Patrick. Patrick, what's the best way to follow you today or is it at LinkedIn? Yeah, I'm on LinkedIn. I post on LinkedIn. I post on Twitter. There's a whole fun conversation that you should have when you have a marketing conference about zero click marketing now. But yeah, that's why I'm more active on Twitter and LinkedIn. So yeah, find me there and feel free to ask any questions. I'm happy to answer. Thanks, Patrick. Really appreciate it. Bye-bye now. Yeah.