Founded in 2014, Netlify offers an all-in-one platform for building and deploying websites and apps. More than 500,000 developers — including at companies such as Cisco, Verizon and Atlassian — have used the company’s products to create more than 7.5 million websites. The startup has received more than $44 million in investment funding from Kleiner Perkins, Andreessen Horowitz and others.
In the fall of 2018, Netlify was about to close a $30 million Series B funding round led by Kleiner Perkins. The startup had launched several successful products and met internal targets for attracting developers to the platform. But with a new injection of financing, company leaders knew that accelerating growth would become a major priority.
In Netlify’s case, that didn’t just mean acquiring new users. It also required improving customer retention, increasing activation rates and growing average revenue per customer. It also meant shifting the user base beyond individuals and small teams to attract larger enterprises. Netlify offered a free version of its platform along with a premium paid option. Even though some enterprises were using the platform, the company was having trouble getting more of them to upgrade.
“A key part of being a Series B company is to establish predictable revenue growth,” says Daniel Freeman, Netlify’s Chief Commercial Officer. “That involves making sure we don’t have a leaky bucket and get the most out of every sign-up.”
A critical obstacle to moving upmarket was the struggle to make enterprise users upgrade to premium plans. Despite the strength and popularity of the product, enterprise sales and marketing efforts were not having the expected results. There was a sense among company leaders that the product positioning and pricing were not aligned with the value Netlify provided to enterprises, but they could not pinpoint the exact gaps.
Another challenge to improving business metrics was the lack of an effective infrastructure for email communications, for highlighting features and positioning products in a way that made their value clear to customers, especially to enterprises. The existing system resulted in low engagement rates and often landed messages in spam folders. “As a small business, we simply hadn’t built it as a competency, and it was an ineffective channel for us,” Freeman says. A stronger email strategy and infrastructure would be essential for activating and retaining users.
“We wanted to leave no stone unturned in perfecting communications to drive revenue and growth,” Freeman says.
Netlify’s leadership largely knew what needed to be done, but the company’s small marketing team was too busy with existing priorities to execute new major projects. Hiring someone internally didn’t make sense for a fast-growing startup, since the skills required for one phase of growth didn’t necessarily translate to the next. And Freeman worried that going with a high-end marketing agency would result in Netlify being treated as a small fish.
Greg Kogan had worked with Netlify on a small project in 2016, and the company’s founders recommended him to Freeman, who was also impressed with his thoughtful blog posts. Netlify hired him as a consultant in September 2018. “With Greg, we could trust we were working with an earnest and talented tactician who was constantly focusing on delivering great work, not simply great billable hours,” Freeman says. “Greg’s ability to be a versatile team player enabled him to fill gaps that we didn’t have staffed internally.”
One of the first things Greg did was set up an effective email marketing system using the Customer.io platform. Greg segmented the target audience by level of interest, feature usage and geography, and he ran multiple email campaigns aimed at improving customer engagement with Netlify’s products. “Nurture” emails targeted new users with automated emails educating them about how to use various features. “Wake the dead” emails reached out to customers who had used the platform just once, sharing news and other content to entice them to return. Newsletters helped build the company’s brand and engage with users, and an email campaign helped market Netlify’s first conference.
“Greg had the skills and capabilities to ensure we do email marketing extremely well and build a foundation for customer communication for years to come,” Freeman says.
To uncover the right positioning and pricing levers to help Netlify move upmarket, Greg applied his Buyer Fluency Framework® to understand the value that enterprise users saw in Netlify’s platform. Based on interviews with 13 enterprise users, market research and experience with enterprise marketing of software products, he identified five values of Netlify for enterprises and the exact messaging for each that would resonate with enterprise buyers.
Four of those five values were available to enterprises through the free version of the platform, and the enterprise pricing tier included only one of those five benefits — enterprise-level support —along with features that were identified as less relevant. This meant Netlify was not capitalizing on their true worth to enterprises.
For example, the previous pricing model assumed that enterprise teams would upgrade their plans to allow more users on Netlify. Greg discovered that Netlify does indeed help large teams collaborate, but because of Netlify’s integration with GitHub many enterprises were simply adding users to GitHub and not Netlify, thus bypassing the need to upgrade.
Greg found and executed other opportunities to drive customer acquisition and retention by communicating Netlify’s value to existing and prospective users, such as interviewing three enterprise customers and creating case studies to illustrate how Netlify solved their challenges, and revising the product marketing for a powerful but little-understood feature of the platform known as Netlify Functions to increase its usage.
Greg’s work enabled Netlify to confidently update the positioning, marketing, and pricing of products to better resonate with the needs of enterprise buyers. In April 2019, the company released a revamped product line and pricing model that aligned with the value those products provided to enterprise buyers. Among other changes, the new pricing was tied to the number of contributors working on a project, even if those contributors do not have Netlify accounts.
The changes positioned Netlify to successfully move upmarket and attain sustainable growth. “Greg enabled the customers he interviewed to really open up,” Freeman says. “We found ways to price better to perceived value and articulate that value in a much more compelling way.”
In the quarter after Greg was retained, key business metrics improved drastically. “Greg helped the organization attain lofty and aggressive growth goals in terms of revenue, active developers, and customer retention,” Freeman says.
Greg’s efforts to install effective email marketing were transformative. “Some people might not like it, but email works,” Freeman says. “Thanks to Greg, we were able to reach our core customer base like never before and be very contextually aware. We were able to build out extremely effective email campaigns with 40 to 60 percent open rates.”
Freeman credits Greg’s email marketing with selling out Netlify’s inaugural conference, JAMstack_conf, held in October 2018, within six weeks. The quarter after Greg began working with Netlify, the company saw its first-ever negative churn of active users, suggesting that email campaigns resulted in dormant users becoming active on the platform again.
One of many smaller wins throughout the engagement was that Citrix, one enterprise customer that Greg interviewed, agreed to present at Netlify’s April 2019 conference in New York. “The great relationship that Greg had formed helped the group from Citrix be extremely comfortable working with us,” Freeman says.
Overall, Freeman says Greg played a critical role in driving growth and setting Netlify up for future success: “Greg was a really strong thought partner in determining the best growth lever to pull based on new learnings from the business. He’s a solid professional who patiently listens to really understand the business and suggest changes that map closely to our needs. That’s high praise — not everybody does that.”
Learn more about Greg Kogan’s growth consulting for B2B software startups →