Jaleh Rezaei, Head of Marketing at Gusto on Scaling Paid Acquisition

Why to go beyond your buyer with your marketing, how to quantify brand equity, and some thoughts on successfully scaling paid acquisition. That and more on this episode of Advertising Influencers.

Advertising Influencers, conversations with today's top-tier marketers from Silicon Valley and beyond, powered by Instapage, the most powerful landing page solution.

Hello, hello! Hope you're doing very well whenever and wherever you are listening. My name is Ander, and this is the podcast powered by Instapage, the most powerful landing page platform for teams and agencies. The podcast is called Advertising Influencers, and each week we interview one of the best and brightest minds in digital media and advertising on their stories and philosophies for for breaking through the noise. It was a pleasure having Garrett Moon, CEO and founder of CoSchedule, on for the previous episode, featuring a robust discussion on marketing and blue ocean strategy. I'd love for you to check it out when you have a chance, but before that, here's what you can expect from this episode. Jaleh Rezaei is the head of marketing at Gusto, formerly known as ZenPayroll. The HR industry is fascinating in terms of marketing. Especially when you consider how many stakeholders are involved. And among many other things, that is exactly what we're going to dive into for this episode. I am super excited to share this conversation with you. So without further ado, let's go say hello to Jaleh right around the corner from Instapage at the Gusto headquarters. I am continually impressed and amazed as I'm going around San Francisco talking to marketing leaders elsewhere, uh, from the companies, a lot of the products that we actually use at Instapage. Gusto is one of those products, just around the corner from Instapage HQ in San Francisco. And here I am today at Gusto HQ with their head of marketing, Jaleh Rezaei. Jaleh, how are you doing? It's a pleasure to be here.

I'm doing great. Welcome to Gusto.

Thank you. You have a shoes-off policy. I've never seen that before, and I absolutely love it.

Yeah. You know, our founders, this was just part of the way they were raised, and our first office at Gusto was one of their homes. And so, whenever someone would come over and they would come to work, they would have to take off their shoes. And when we moved into an official office, they just kept that as a tradition. And we've been doing it. Now, we have 400 employees. We're still not wearing our shoes.

It's that many people, all not wearing their shoes every single day.

That's great. That's right. In San Francisco and in Denver.

Awesome. And you said "we." So, from what I understand, you've been with Gusto for quite a while now.

I joined a little bit over 3 years ago when we had 12-ish employees.

At the time that you joined Gusto, how did you view marketing? How did you view what you were going to do when you came in here and tackle the interesting set of growth problems, I guess you could say, that marketers have?

When I joined Gusto, I actually joined in a slightly different role. I was leading our API program and business development and partner marketing. But I was, you know, part of the business team that was responsible for a lot of our marketing efforts. In a lot of ways, in the early days, we operated like a really scrappy growth team. So our strategy was, at best, hypothesis-based A/B testing. And our goal was to get X number of customers. We knew that tech companies is where we had the best traction. And so our strategy was very much aligned to where do these folks hang out and how can we get in front of them as quickly and cost-effectively as possible.

And what did you identify were those most cost-effective and quick ways to do so?

You know, incubators was a really great channel for us. We leveraged going into, like, for example, we were a YC company ourselves, and so we asked asked to be included in their events. We would send them materials. Every incubator has, you know, community managers, and these folks, if they believe that you have a product or service that's valuable for their users, they'll often just let you get in front of their users at no additional cost. And so that was our primary go-to-market channel in the very, very early days. And then as we grew bigger, we expanded into the accountant channel. I'm a big believer in partner programs. A lot of, pretty much every product that you sell, there is a group of influencers that are already working with the customers that you want to reach, and they can introduce your product to them if it's something that would solve a meaningful problem for them in a way that other products that are out there can't. For us, that channel was the accountant channel. The majority of small businesses work with an accountant. Accountants recommend financial products to their customers, and payroll And this was certainly one of those. And we started getting a lot of traction from accountants actually reaching out to us and saying, oh, I've heard about Gusto from my client, and I'm interested in potentially introducing it to other clients. And then we started getting into that a little bit more and talking to more and more accountants, trying to understand the market. And we decided this was going to be a really good channel for us and a really scalable program.

And it sounds like that discovery of accountants being the ones to help you break through the noise and get out there to the companies using your products, it sounds like that discovery was almost by accident. Or was there some more intention built behind it?

Yeah, it's a good question. I am not sure if it was entirely by accident or not.

At the very least, if it was, I'm sure it was a very nice surprise.

Yeah, it was definitely a very nice surprise.

And if it wasn't, it was a very smart decision.

Yeah, yeah. You know, one really nice thing about payroll is that your accountant has to interact with the product. And so when you implement Gusto, even as a business owner, you end up adding the contact information of your accountant, and your accountant then gets access to Gusto. So they are, they are a user of Gusto in some ways. And that was the first interaction with the accountant. And From there, they would then say, I'm interested in learning a little bit more about it.

I gotcha. And you're in this very unique position, or I should say the HR industry, anything that is related to payroll, anything that's related to benefits, whatever it might be, in that you have to be keeping the companies happy. You have to be keeping the accountants happy. But as somebody who gets paid through Gusto myself, you also have to be keeping the employees happy. And maybe getting them on board with switching over to Gusto without having any anxiety about where their paycheck is going to be coming from. How do you address that fairly unique problem?

Yeah, it's a great question. It surfaces itself in a, in a different way maybe than, than the way you phrased it. Sure. You know, you implement an HR product because you're trying to take care of your employees, right? However, because HR products are sold to the business owner or the person responsible for HR, they— the employee over time is not considered as a stakeholder anymore by most HR companies. And sadly, the needs of the employee gets removed from the equation. This is the way that the HR industry has operated for a while. And one of our founding principles when we started Gusto was that the employee is a very important and equal stakeholder because the whole purpose of an HR platform is to, is to help take care of your, your people that are at the company and to empower them. And therefore we've designed Gusto to have a really great user experience for both the employee and the employer. I see the, the employee side as a huge growth channel for us. If we build a great experience for the employee and they consider our product indispensable, when they go to their next company, they are recommending Gusto. And so it's an audience that we've cared really passionately about from, from the beginning. And even to this day, they are a huge advocate group for Gusto. And there are a lot of companies who discover Gusto because their employee recommended it and they used it in their previous one. I think these growth loops is something that we think a lot about. You know, how do you think about, you know, where does your product sit? And don't just think about your buyer, but who are the influencers or the folks that touch that product or need to interact with the product? And how can you give them an experience that's really valuable and indispensable? And once you do that, then you can use those folks as a growth and referral channel for the company. You know, the accountant channel, was, you know, in many ways, you know, we were introducing the accountants. So, here's how it would work. Someone would buy Gusto and then their employees would get introduced to Gusto. Now, these employees are now, you know, when they leave their company, they're recommending Gusto. On the accountant side, when someone uses Gusto, they have to add their accountant to be able to get tax information from the product at the end of the year. And so, we would add the accountant, invite them to Gusto, and now that accountant is aware of Gusto. and we can then nurture them and talk to them about the value of being part of our partner program. So we spend the money to acquire one customer, but then that customer has a much stronger viral coefficient because we tap into these influencer networks that are around them.

That viral coefficient obviously is very, very important to how you view your growth and your marketing strategy overall. How do you amplify or maximize that viral coefficient? Is there an inbound content strategy to be engaged engaged with the employees? Is there, you know, are you targeting employees who are paid through Gusto? Are you targeting them in ad campaigns? What's some of the ways that you attempt to do that?

Yeah. So, I think it all starts with earning the right to use someone as an advocate, right? That's powerful. Yeah. And so, if someone is just not aware of you and you don't solve a real problem for them, you can ask them, over and over again to refer your product, then they never will, and over time you're just gonna frustrate them and turn them off to your product and service. So, we always make sure, you know, what are we doing to create a really great experience for this user, and we measure that with NPS. We're pretty religious about measuring that promoter score from the very early days. We measure it in every customer segment. So, all the different profiles of folks that use Gusto, we measure it, and our goal is is to be at an NPS of 80, so we tend to hover right around there in the various segments. And when we have a high NPS for a segment, then we can start to ask them, hey, who, you know, we obviously solve a real problem for you, who else do you know that would benefit from our service? In the early days, the way we did this was we would just send people emails and they, would refer our product and we would manually manage it on the backend. We've gotten a lot more sophisticated at the way we do this. So, you know, step 2 for us was we built it into our product. So, if you logged into Gusto, you could see your referral link and employees have the same referral link that they can use if they want to refer Gusto to anybody. We now, you know, enable companies to connect their contacts and we have embedded the referral flow into a few different interaction points, which we constantly test to make sure that it is relevant for the user, it's not too intrusive, and that it shows up at a moment where, you know, you would be interested in potentially taking the time to refer Gusto to somebody else.

Gotcha. That's really interesting, and I want to come back to that in a little bit, but there's something that I'm, you know, I'm seeing out of the window of this conference room we're here in right now, and you've been here since 2013, quite a long time. You've gotten to experience how Gusto has really grown into, you know, 400 employees as you said earlier. And when we talked on the phone, I guess it was earlier this week, one of the things that you mentioned you'd like to talk about is marketing leadership.

Yeah.

I am wondering how, as a marketing leader, the marketing leader within an organization, how you adjust to that kind of of growth within your organization and how that's affected you as a leader and how you see your role here at Gusto?

It's a, it's a great question. You know, one of the biggest assets that I think Gusto has is our culture.

Your shoes-off culture.

That's part of it.

Right, right.

That's part of it. And I would owe our culture to kind of a few different things that we have done. One is, you know, we were very specific about what are our values, you know, as a company. So, when, you know, Josh Tomer and Eddie created the company, they said, what are our values as people? And those are going to be the values of our company. And when we interview folks and bring additional folks to the company, we're going to make sure that they are aligned with these same values because you can't really teach values. You can't change them. You know, you have them. And so, that was a big part of our hiring process. Our interview process, a lot of our policies are designed around those same values of, like, for instance, transparency and being a builder and thinking in a scrappy way, being an owner, etc. And as we have grown, we have just very deliberately invested in culture. You know, we have a— we're known to have a pretty intense interview process, and a big part of that is is not just the skills, but making sure that the person is aligned with the mission and what we're trying to do at Gusto. And that's something that they genuinely care about as a person. And so, to me, like a lot of our, the role of our leadership team is to embody those values and to, you know, be a good role model to everybody else on the team. Specifically around scaling. When it comes to, you know, scaling Gusto and the marketing team, you know, I took on the marketing team about a year and a half ago.

And how big was it at that point?

At that point, it was just a little bit over 10 people.

Okay.

Yeah. And we're now around 30. You know, one of the things that I find that I've really invested in with the team that I think is really important for marketers is is investing in the core skills that makes you successful at acquisition in today's world. And for me, like, my marketing philosophy is the same as my business philosophy, which is you have to be— in a highly competitive market, you have to be right about important things that others are wrong about. And the way to do that is you have to be incredibly creative. And you have to be first principles, data-driven thinkers. Creativity because if you just do the same thing that everybody else is doing, it's really hard to break through the noise and stand out, right? You go to every website, everyone's just saying the same thing. You can imagine how hard it is to break through. And then first principles thinkers because I think you have to make sure that you're solving the right problems. So I'll give you an example maybe that kind of helps bring these things together. You know, you might on a You might be on a content marketing team and say, "Okay, we think our audience has a lot of questions and that they want to connect with each other and a really good way to do that is online forums. So, we're going to go around and look at different forums and then build a better forum." If you apply the kind of deeper needs-based thinking to that, you might say, "Well, Why are customers coming to an online forum, right? Are they trying to answer their HR questions faster and more confidently?

Mm-hmm.

Or do they feel lonely and they have this emotional need to connect with people that are like-minded, that are solving similar problems? Both of those— I mean, those two things are very different, and I don't think the solution to either one of those, the best possible solution, would be a better forum.

Mm-hmm.

So you might take a very different path if you identify the problem more effectively. So those two skills of creativity and first principles problem solving are two things that we spend a lot of time as a team training folks and helping them understand, okay, you know, let's take a look at this proposed solution here. How can we, you know, how can we improve it? And so we're constantly investing in those skills for the team as opposed to, I would say, like much— I think those are much more important than any specific technical skill in marketing.

Gotcha. So, with everything you're talking about in terms of creating evangelists out of the employees who are getting paid through Gusto, and you're, you know, reaching out to these accountants, working with these influencers, how does paid acquisition fit into that strategy for you guys?

So, paid acquisition, and maybe I'll just redefine it as, you know, there's 3 types of media: earned, owned, and paid. And at the end of the day, everything costs money, right? But I assume by paid acquisition you mean paid media and advertising.

Specifically PPC, whether AdWords or Facebook or whatever.

Yeah, absolutely. Paid acquisition is a— is an important part of our strategy, but it leads to a relatively small portion of our customers. And it's interesting because we have an unlimited budget on paid, meaning as long as it's cost effective, We don't arbitrarily cap the budget. And most companies that have the luxury of having, you know, VC funding tend to operate in that way. And so with that, why is it that paid acquisition ends up being a small portion of our overall customer acquisition mix? And it's because it gets really hard to scale paid acquisition. So as you keep growing, you have to expand and go to channels that become less and less cost-effective. So, for example, we use the see, think, do, care funnel view. I think Google is who coined this. So, see is your total addressable market. These are all the folks, for example, who are a good fit for our payroll product. They're within our employee count. They're the right company size, etc. Then think is the percentage of those folks who may be thinking about changing their payroll product. And then do is the very small percentage of those folks who are actually looking for a new payroll product, for instance. And when you want to invest in paid advertising, you obviously start from the bottom of the funnel and you go to the top. And so often you'll find really good success in the do bucket, right? These are the folks who are, you know, going into Google and putting in, you know, payroll software for for startups or for small businesses or whatever it is. And you can, with some optimization, you can usually make that channel really cost-effective and start to expand your keywords, and that becomes a really good channel for you. However, as you, you run out of that inventory, right? And so as you start to scale, you now have to go up the funnel to folks who are perhaps, you know, not ready to make a switch. They probably don't know who you are, and you have to get them to know you, become, you know, intrigued enough by you to cause a reevaluation and to get them interested and then now engaging with you and signing up as a lead and becoming a customer. And at some point, like, that process kind of breaks down, so you can keep improving it by doing a lot of testing, testing and really improving your conversion rate, but typically, you know, depending on what the unit economics of your business are, the cost of acquiring that colder and colder customer becomes prohibitive, and even though you have unlimited budget, you can't make it cost effective, therefore a lot of channels that are available and have a lot of inventory will become inaccessible to you. And so the best thing you can do is just like continue testing, and obviously as your company grows and more and more folks become aware of your product, you'll see a lift in the paid channels as well, for sure. But generally speaking, I don't recommend having anything more than 30, often like definitely no more than 50% of your direct acquisition budget be spent on paid. If you can make it work cost-effectively, more power to you. But I've almost never, never really seen that work. So partner and organic like need to be huge areas of investment, I think. For, especially if you're serving small businesses, a low ACV kind of a customer.

Excellent and actionable advice. I totally agree with that and totally understand what you're saying. And as this relates, everything we've spoken about, you know, earning the right to actually work with those influencers, to speak to those audiences, maintaining that level of creativity as you scale your team, and some of the unique challenges that face companies like Gusto in the HR industry, where do you see see all this going in the future? Just on a very high level, if we look at marketing, we look at what you do, how is this going to change in the next few years and how can marketers get ready for it?

Yeah, yeah. I'm an engineer, right? And so you can imagine what, you know, what camp of marketer I'm in, right?

Our head of marketing is actually also an engineer.

Yeah, yeah. So, you know, I started in a very data-driven way, which is, you know, you form a hypothesis, you run an A/B test, and whatever those results are, That's, you know, that's what you do and that's what you implement. Over my time here at Gusto, I have come around on brand much more so than I had anticipated. And brand's interesting because brand has a really bad rep among the, you know, the new marketers. When you hear the word brand—

The very quantitative.

The very quantitative marketers like us, right? Uh, and when you hear brand, you immediately think billboards and, you know, running— spending millions of dollars without being able to prove ROI. My definition of brand is essentially the sum of the interactions that your customer has with your company. And so a good brand just means that you have customers who love you, who can't live without your product, and who are advocating for you, and they have this emotional connection with your brand. Brand. You actually can measure that, right? You can measure NPS. You can measure your word of mouth and virality. Now, when we design our customer interactions, we're always asking, "How can we do this in a way that forms an emotional connection with our customer by showing them that we care about them, that we appreciate them, we understand them, and that we're really on their side?" Now, I care a lot more about things like what is our brand personality and how How are we showing our love towards our customers?

You have to tug on the heartstrings.

Right, exactly, exactly. And how do we make sure that this is consistent across all of our interactions? And, you know, when you design from there, then you can use data to measure the effectiveness, right? Is it— is our brand resonating? Do people feel a connection to the company? Are we inspiring that loyalty or not? And so now I would say I've become like in some ways I would consider like a much more well-rounded a good marketer in that you understand the value of the brand, but you're still data-driven and you're applying those same principles to the brand side of the house. But that's been a, that's been a great development for me.

That's awesome. Love hearing the personal stories, especially from people who are working with such cool organizations like this. And on that note, we are running short on time and I want to respect the very busy schedule that I imagine you've got going on here. What is something that we as marketers, what is something that we can do just to make marketing better, the marketing community better as a whole, or to help out Gusto? Obviously, if you are already using Gusto, we should tell all of our friends how happy we are to get our paycheck through you guys.

That's right. To me, marketing is one of the hardest functions in a company to build, right? Because you need your quant side, you need the qualitative creative brand side. And I think being clear about what the role of marketing is really important. A lot of times when people hear marketing, they just assume it means you generate leads. And I think good marketing teams should be influencing a lot more than that. You should be thinking holistically about the funnel. So, we define, you know, our mission here as help our customers discover, adopt, and evangelize for Gusto, which means that marketing is involved at every stage of the funnel, all the way from becoming aware of us to evaluating us to using the product to then later buying additional products from Gusto and driving evangelism for Gusto. And I think when you define marketing in that way and really incentivize like your team to be excited about revenue and the short and long-term growth of the company, that's when marketing can earn a much bigger seat at the at the table and be part of setting the strategy of the company.

Awesome. Jaleh, it was excellent being here, coming to your office. You're right around the corner from us here in San Francisco, just south of Market Street. And it's been a pleasure being here. So, once again, thanks for coming on the show and I'm sure we'll talk to you soon.

Awesome. Thank you.

Here are the takeaways from our conversation with Jaleh. Go beyond your buyer with your marketing. There's no doubt that it's important to be marketing towards the primary stakeholder and the person with the purchasing power. However, it's also important to target and craft messaging around the needs of other stakeholders or influencers that are close to the target customer. Yes, it is possible to quantify the quality of a brand, at least to a certain degree, using NPS. NPS scores. Many modern marketers, especially technical professionals empowered by the vast amounts of data, find the value of a quality brand difficult to measure. At minimum, quantifying brand equity can be an abstract and uncertain process. Using NPS scores can make this much easier. As powerful as digital advertising has become, successfully scaling your paid acquisition can be challenging as you expand your audiences and advertising platforms. However, this does not mean you shouldn't do it. All you need is the right framework. A potential framework for understanding and addressing this challenge is the See, Think, Do, Care methodology. This can help you evaluate when, where, and how to invest your digital advertising budget. So happy that we got a chance to connect on the show with Jaleh, and it was really cool to check out Gusto's shoe-free office. I thought that was really neat. But seriously, her thoughts on scaling your paid acquisition are absolutely worth noting if you or your clients or even your marketing friends are starting to embrace new channels of digital advertising. As always, the show notes for this episode and every other episode of Advertising Influencers are available at instapage.com/podcast. Feel free to check out all of our other marketing resources as well, including our killer blog with new content almost every day. And feel free to reach Reach out to us at Instapage or me directly if you'd like to. My email is ander@instapage.com. Next episode features an awesome marketer, most recently coming from a company that made some fairly big news across the marketing technology landscape. Trello was recently acquired by Atlassian, or it was recently announced, I should say, and JD Pedersen, the former CMO of Trello, was certainly a contributing factor to making that happen. In the past, he's also served as a VP at Marketo and Zendesk and had leadership positions at a number of other organizations. Really hope to see you here because he is among the best of the best, and I can't wait to share that conversation with you in the next episode. All right, my fellow marketers, I am out for now. My name is Ander, and this is Advertising Influencers, the podcast powered by Instaprint.

Page.

Cheers to your future success and cheers to better marketing. I will talk to you soon.

Advertising Influencers. Conversations with today's top-tier marketers from Silicon Valley and beyond. Powered by Instapage, the most powerful landing page solution.

¡Gracias!