Written by

David

Published

December 8, 2022

I recently interviewed at Netlify for a Director of Digital Marketing role and made it to the final round (vs one other person).

The final interview stage included this assignment which I presented to the CMO (Dorian who btw, is an awesome guy). The feedback from him was strong and I thought for sure I’d get the job. Unfortunately they went with the other candidate (who I later found out used to work with Dorian at a previous company 🤷🏽‍♂️) so I was disappointed to say the least.

I ended up spending 8-10 hours on the assignment (unpaid) even though they recommended I only spend 2-3 hours. I’m not sure if they ended up using any of my suggestions, but regardless I wanted to share my work since it applies to any tech SaaS PLG company (read about my thoughts on unpaid assignments in the tech world).

Assignment Results

Based on the information provided in the pdf, there are two things I see that need to be tackled.

1. How does Netlify upsell existing freemium users to paying customers?
2. How does Netlify improve the overall freemium onboarding process to increase conversion rates to paying customers?

1) How do we upsell existing freemium users to paying customers?

The overarching goal when marketing to freemium prospects is for them to understand the difference between free and paid versions. Show them what they’re missing out on without pushing the sale.

The beauty of a PLG approach is that marketing teams are equipped with product usage data. We can use this to develop very targeted content such as guides, tutorials, best practices, higher-quality thought leadership pieces, and build marketing nurture campaigns based on existing profitable customer segments with a higher potential CLV.

What criteria would you consider in order to identify an ideal customer profile (ICP) for the paid Pro and Business plans?

I’d first look at all existing Netlify customers. Which accounts are most successful and why? What was the path taken and sequence of core features that, once adopted, would lead to a paid plan? Which have the greatest CLV? How did they find Netlify?

I’d then look at firmographics (geo, industry, company size, segment, revenue, budget, tech stack, etc). Product usage data will also help us understand the most popular features and usage patterns that demonstrated success. You can also correlate this data with primary growth metrics (MRR, churn rate, CLV, etc.). Talk with sales or look at the account notes in the CRM and understand how and why we won the deal.

On the flip side, I’d also look at accounts we lost and understand the reasons why. Lack of budget, lost to a competitor, freemium provided more than enough features, etc. That will help me filter out those who we shouldn’t market to in this campaign (those could eventually be nurtured in a different campaign though).

Within the ICP, I’d then build out the buyer personas by looking at demographics (job title, job role, department, age, goals, pain points, etc). These should be available via Clearbit or from the “tell us about yourself” sign up form data. Where do these people spend time? Stackoverflow? Jamstack Conf? Local Meet Ups? Figure out where their watercooler is.

Then I’d look at the freemium user’s behavioral data (assuming Netlify has product analytics like Mixpanel, Akita, or Amplitude) to understand usage patterns. The features they interact with the most, features they interact with the least, the number of times they open the app, etc.

How would you go about segmenting the 3M developers to target this ICP?

Based on the ICP data results from above, I would then segment them into three main buckets.

1. Not an ideal customer (not likely to ever upgrade. Student, freelancer, individual, etc)
2. Too small, lacks budget
3. Ideal customer with budget

The first two buckets I’d ignore; at least for now. The real opportunity is in bucket #3. From here we can build out very targeted campaigns and create “urgency” by communicating new premium features that deliver more value or by highlighting the value missed by not having access to a paid plan.

What would be the campaign positioning and messaging?

This would depend on where they are in the onboarding process. The goal is to re-engage inactive users and show the benefits of reaching initial value in the product. We’d want to break out the campaign into different nurture streams based on their usage/behavioral data and time last active. Here are 3 example campaigns we could run:

1. For ICPs with low usage and haven't logged in for a few days:
1. send a personalized email offering guidance based on their product usage. “I noticed you haven’t logged in for a few days and weren’t able to set up a test project. Here’s a link to a tutorial on getting started”
2. For ICPs who didn’t complete any milestones (didn’t realize the “aha” moment) in the past X months:
1. send a personalized email with a link to the tutorial or guide to encourage them to complete the unfinished or next milestone in their onboarding process (using product use data). “Hey Bob, we haven’t seen you around here recently and wanted to make sure you got the full value from our freemium plan. Looks like you started to connect your “XYZ” Github repository but weren’t able to complete it.” etc
3. For ICPs who completed at least one milestone during onboarding in the past X months:
1. send a personalized email with a link to the tutorial or guide to encourage them to complete the next milestone in their onboarding process. “Hey Kevin, we haven’t seen you around here recently and wanted to make sure you got the full value from our freemium plan. Looks like you unlocked the first task by deploying a project (🙌). Your next challenge is to set up a build. We’ve got a great tutorial here.”

What Marketing delivery channels would you focus on, and why?

The go-to way to engage with prospects is within the product but obviously we can’t because they probably aren’t in it. So the next best spot to go is their inbox.

Unsubscribe rates are already high and email fatigue is real so the messaging needs to be laser focused and grab their attention. We can also run smaller tests before hitting the entire database.

Here are the key components for a successful email:

• It’s personalized
• Simple design that makes it easy for them to consume
• It surfaces the most important features they’re missing out on or didn’t complete
• They have a really clear and straight-forward CTA

What collateral do you imagine you would need to support the campaign?

• Tutorials and guides to link to from the emails
• Design to create a simple email header graphic (optional)
• Copywriting resources to craft the email content
• Development resources to build out and setup the emails

What metrics would you use to measure success?

• Some vanity metrics like open rates, click-through rates, unsubscribes
• # of prospects that re-engaged and completed their first milestone
• # of prospects that completed a new milestone
• # of prospects that converted to a paid plan

2) How do we substantially increase the conversion rate from free to paid?

Is the funnel leaking? Get a quick win. I’d first look at the onboarding funnel metrics to understand where the most friction lies and where prospects fall off. Tweak this step to improve the % of successfully onboarded prospects.

A longer-term solution would be to create (or modify) a PLG onboarding process that moves a freemium prospect through these stages at a higher velocity:

Initial Signup => Experiences Initial Value => Reaches PQL Status

It should be designed to help prospects become familiar with Netlify and realize initial value ASAP.

The onboarding process should have specific milestones and goals. Connecting onboarding goals with milestones enables Netlify to know where prospects fall off and why. Every milestone should end with a prospect receiving new value from the product. Hitting a milestone should feel like a completed task.

Second, we clearly define a PQL as a prospect who completes milestones 1, 2, and 3 (deployed a project, set up a build, and added an integration).

As soon as a prospect reaches PQL status, a Netlify BDR is notified to follow up with the prospect to offer a personalized demo of the full product.

We’ll base our nurturing campaigns on in-product behaviors. Here’s how I’d build it out.

Start Milestone #1

MILESTONE #1 COMPLETED - Initial value delivered Prospect sees live app/website they just deployed

⬇️

Start Milestone #2

MILESTONE #2 COMPLETED - Product feature value realized Prospect sees even more value

⬇️

Start Milestone #3

MILESTONE #3 COMPLETED - Another product feature value realized

⬇️

Summary

There are certainly several more milestones and paths we could add to the onboarding process but without having insight into all existing processes and metrics, it’s hard to go any further. I’d also want to work with the marketing, product, engineering, and data teams to brainstorm ideas and build out the best possible onboarding experience. Include a testing layer to always be improving.