How Ditching the Acquisition Funnel Supercharged Growth w/ NextRoll Senior Dir, Growth, Julie Zhou

Welcome everyone, welcome, welcome. Come in, come in. Thank you all for joining us. You're on the West Coast, hopefully you just had a nice lunch. If you're somewhere else in the world, thank you for joining us. Letting in, letting everyone trickle in. And excited to kick things off. Great. So we've got Julie Zhao, um, who is Senior Director of Growth at Adderall. She's going to be talking about Everyone is Your Customer: How Ditching the Acquisition Funnel Supercharged Growth. Really excited to pass it over to her. I know we have some great engaging breakout sessions in a little bit. Um, before I let her take it away, I just want to walk through some housekeeping and a couple reminders. First, we have a 50-minute session here, so lots of things happening. Julie is going to give a talk. We're going to go into some breakouts. We're going to come back for Q&A. She's tag-teamed her colleague to come in and help, so we've got two different breakout options for you, which I'll let her tell you about in a little bit. We want to keep this interaction— interactive, so we encourage you to keep your cameras on and your audio muted. If and when it comes time for Q&A and you'd like to ask a question live, feel free to unmute yourself. And so you can ask Julie your question directly. You can also submit questions in through the chat if you're more comfortable with that. And yeah, you will be able to self-select your breakout rooms depending on which one you'd like to choose. If for some reason that option isn't available for you, we will go ahead and self-select. So just to make sure that you're able to join a conversation. And then after the breakout sessions, you'll come back to this main session for Q&A. At any point throughout all of those, um, processes, you're able— and we encourage you to drop in Q&A into the chat so that way we've got plenty of questions teed up and loaded for the end of the session. And, um, last and final reminders: these will be recorded and available, both the slides and the video recording, so be sure that you are following along SASTR's YouTube and SlideShare channels. And then don't forget to join us for one-on-one networking umbrella. Super easy to sign up. You can then search by name, by role, by company, and find like-minded people that you might want to network and connect with, and all facilitated right within the platform. So they'll work on those one-on-one conversations and make it work for you. I will drop also the Brella link to join, um, into the chat so everyone can check it out. And that's all for me. So Julie, I'm going to pass it over to you. Take it away.

Wonderful. Thank you so much, Caitlin, and thank you everyone for joining myself and my colleague Jamie for this roundtable. I'm super excited and honored that you've chosen to spend your time with us, and I'm going to do my absolute best to make it worth your while, share some really useful insights that you can take back and use in your day-to-day jobs. So the topic is Everybody is Your Customer: How Ditching the Acquisition Funnel Supercharged Growth. As a reminder, uh, My name is Julie Zhou. I am the Senior Director of Growth at AdRoll, which is a division of NextRoll. NextRoll is a parent company of AdRoll and RollWorks, two different business units that services two different types of customers. My background and career in growth has lasted, like, over a decade and has involved working in many, many different functions. A short list is the things that you kind of see here. And I found that, like, being successful in growth has really not come— not come from developing a really deep expertise in one particular discipline, but really rather kind of applying a data-driven mindset and constant curiosity to learning what new skill or new tactics are best for driving growth, because the tactics that worked really well last year may no longer lead to success this year. And the same principle applies when I and the marketing team were facing kind of an existential challenge for AdRoll in terms of a need to change growth tactics that had been working very, very well for us up until recently. So the origin of AdRoll was that we were incredibly customer-centric from the beginning. Our founder, Aaron Bell, His wife had started her very own nutritional— homemade nutrition bar company from their kitchen. Like, she would make single packs of granola, energy bars, energy packs, and she wanted a way to, like, promote it and to be able to sell it to similarly fitness-minded and health-minded friends. And so Aaron decided he would call up Food Network, Health.com, Shape.com, and just ask, "Hey, I'm willing to pay you money to place ads on your site." And the responses that he got were very similar. "Tell us who your agency is, and minimum buy-in is $200,000," which is just a non-starter from the get-go. So Aaron, being Aaron, didn't take no as an answer and decided to start his own company, which was a network where small growing companies like his wife's startup could get access to inventory that had previously been out of reach for smaller companies and instead focus toward large companies with large budgets and agencies. And somewhere along the way, his company came up with the technology retargeting, which every single one of you has heard of for better or for worse. And we truly entered a golden age of growth. Like, we became the retargeting leader that every company wanted to work with. They were the types of conversations that you dream to have with customers and potential customers. They say, "I know you offer this and I probably need it, so just tell me how to sign up," right? Like, you barely had to sell anything. The product literally sold itself. And we continued like this for a while because we found great product-market fit. But good things never last forever. And eventually, we realized that we were reaching a standstill. We realized that sales was a truly well-oiled machine. But as a company, we had hit a plateau with our customers, in particular, the relationship that we had with customers. Our customers saw us as the best retargeting vendor in the world, but still only a retargeting vendor. We were only as valuable as the last cost per click. We had no long-term relationship with our customers. And it took us a while to realize this, but then when we realized that we had reached this point, we understood that there were actually many, many signs that had— that we perhaps had missed in the past. I think my screen is finished loading. There we go. And much like in the movie, though, you often don't recognize that the signs are there or can't see what they are unless you zoom out, look at the bigger picture, and look at kind of trends that happened over time. And there are two primary signs that we should have been out on the lookout for that we recognize now, that each of you can kind of take as a symbol that perhaps your company or your growth strategy is kind of hitting a plateau. The first sign manifested itself in our Net Promoter Score. Most of you in the room have heard of Net Promoter Score, and you use it to track customer satisfaction and product success. So Net Promoter Score basically works where you ask your customers, "On a scale of 0 to 10, how likely is it that you would recommend "my brand or product or service to a friend or colleague?" And you take your— the percentage of people that give you 9 or 10, which is promoters, and you subtract all the detractors, and that is your net promoter score between -100 and 100. And you can see from this formula, this is a very strict bar to pass in order to become a promoter. You have to be a 9 or 10. Anybody that gives you a 7 or 8, they don't participate in the conversation because they're like, not a promoter, really. So, now that you have seen this, let me ask all of you to think about a question. If you're feeling brave, you can type your answer in the chat, and I highly encourage it. What is the worst possible NPS that you can have? You can think about it, you can type in the chat. The answer is not obvious. As you may imagine. Those of you who are thinking about it are probably imagining something like negative 100, and that is a very, very tough situation to be in. Everybody hates you, and you should probably be reevaluating your career or your company options. However, a much worse situation actually than negative 100 is to not know what your customers are thinking at all. The worst possible NPS to get is no score. And what we observed was we thought AdRoll's NPS was fine. We were tracking our score over time, and it wasn't going up, it wasn't going down, it was staying pretty constant. But then we started noticing that it would fluctuate wildly from month to month. It would average out the same, but it fluctuate wildly. We realized the reason that was happening was we were getting fewer responses. Lower volume of responses meant that we were more susceptible to, like, a flurry of positive responses or a flurry of negative responses. And what we realized was that even as our customer base was growing, the response rate was going down, meaning our customers as a whole were becoming less engaged. So it's terribly important that you pay attention to the volume of customer feedback that you're getting in addition to the sentiment. And the reason is pretty clear. Having an NPS of -100 is awful, but it sends a very, very clear signal of what you should do. People who feel strongly enough to tell you that they hate you will probably tell you why. You get feedback from them. But from an unresponsive customer, you naturally get no feedback. You don't know what to do. And an increase in unresponsive customers, meaning a decrease in engagement, it really had cascading diminishing impact on all of our other marketing activities. Setting up meetings with prospective customers became much harder. Meeting— finding people who would meet us at events became harder. Finding customers to join our advisory board became a lot harder. Harder. So first sign, decrease in volume of NPS responses. A second sign of reaching a growth plateau manifested itself in our paid advertising campaigns. So usually the marginal cost per user, like how much it costs to acquire the next user for paid advertising campaigns, This cost usually increases slowly with spend. As you tap out your highest consideration buckets, you need to start drawing in customers who hit— need more convincing to give you a try, but only a little bit more convincing. You start hitting diminishing returns, and this cost creeps up slowly, usually. This is not good, and this is what we observed, that it was becoming exponentially more expensive to acquire the next user. This is always a sign that you have tapped out basically your only bucket of potential customers. There were no more prospective customers waiting in the wings or had heard of us, who had already learned about our product and were convinced enough to give us a try. We had spent no time building long-term relationships with customers, building goodwill with potential prospective customers. We had just been waiting. For them to come to us. So we started experiencing exponential increases in marginal cost per user, and that was the second sign. So what did we learn? We learned that building great technology only got us so far. It got us really, really far, but there are limits, because customers expect relationships in addition to results, and the relationships become super, super important when you start wanting to, pitch additional products. We offer not only retargeting but a full e-commerce marketing platform, including email, including on-site upsells and optimizations. But we had been having to rebuild our relationships with our existing customers from scratch with every single new campaign and every single day that passed. Because we didn't know our customers and they didn't really know us, we really had to go back to our roots and like Put the customer first. What is it that customers want? What is— how could we make sure that customers had already formed an opinion about us before we asked them for any money? More specifically, how do we shift a marketing team and a sales team's mindset away from the concept of acquiring customers? Directly acquiring customers in this case was not working, because again, there is not this ready bucket of customers for us to acquire. So, in order to change the behavior of this team that has been incentivized for so long on the sole purpose of turning leads into customers required a mindset shift. It required us to think that everyone was already our customer. You don't turn people into customers. Everyone is already your customer, and you need to treat them that way. So the acquisition funnel that everybody has seen, and some people love, some people might love to hate, it treats customers as a destination. Only after passing through all the required stages of a customer journey are you granted the quote-unquote privilege of becoming our customer. It's very self-centered. It's very selfish in a way. But there's a lot of people lost along the way, and it feels like almost an expedition to climb a mountain with a really, really crappy guide who loses 90% of the group along the way. That's just so much missed opportunity. So rather than thinking about funnels, the flywheel believes that everyone is already a customer. Flywheel framework is something many of you probably have heard of. HubSpot is truly one of the best practitioners of this framework, so we've learned a lot from them. It places customers at the center of everything you do. Customers join the journey on their schedule. They dictate it, and you as a company do not invest any less in someone just because they're not spending any money with you yet. So in the— in this case then, how do you then attract a customer who doesn't yet know that you exist? To do that, you have to give them something valuable without asking for anything in return. And the best way we found to start this, and the tactic that AdRoll chose, was to start with content. There are a couple of guiding principles when you're designing a content program. The first is, sounds obvious, but it's something that a lot of companies get wrong. It's a commitment to write about topics that excite your customers. I can't tell you how many companies continue to treat content as if it's about them, as if it's like, oh, it's content about us, about the company. We're going to invest in tutorial videos, we're going to invest in super high production case study videos, and that's not content. Like, customer testimonials, they are a great investment that belong in your customer advocacy hub. They are incredibly useful to to send to customers who are already in the engaged bucket, who have already decided they want to consider you and maybe just need that little extra push. The content that I'm talking about, which will like grow the size of your potential audience, those who are not yet aware of you, is the type of content that these customers, prospective customers, seek out in their spare time. It's content that covers topics that they want to read, because they're actively searching for them. White Claw is not our customer, but they are a brand that exploded in growth. They're a brand that many of our customers who are growing direct consumer e-commerce brands, they are a brand that they aspire to be like. And they just had a super interesting organ story. This is one of our most popular and most shared pieces of content. And when our articles do talk about topics that are related to work— Instagram influencers, right? It's got something to do with advertising, but it's not actually about the AdRoll product, because AdRoll does not offer Instagram influencer management. But we knew it was a topic that would make our prospective customers better marketers, and therefore build goodwill. In times of economic turmoil, our customers are still searching, your customers are still searching for content. Maybe it's not about content that excites them so much, maybe it's more for content that can help them, help them get through this. So we actually adjusted our strategy accordingly in the latter half of this year, because the idea was that we knew that customers would remember who it was that helped them when they were in need. So again, these were very, very popular pieces of content that we published. So write about topics that excite or help your customer, principle 1. Principle 2: Outsource your production to experts. We were very intimidated at the idea of starting a content marketing program, because we were really worried about how much we could invest or make a case to the CEO in order to invest in building a writing team. But in reality, you already have a team of writers to go, even without hiring a single extra person, or perhaps with hiring like one great person. And your product marketers are experts at explaining your product to people who have no idea why they should use it. The— and everyone here are people within AdRoll who wrote content for our content marketing program, and not a single one of them was a professional writer. Include people inside AdRoll and outside of AdRoll who had a desire to build their personal brand. What we truly aspire to be is something like HubSpot, which is so well known as a destination for quality content that people will brag about their participation in their LinkedIn profiles, as this person has done here. So by writing about topics that excited our current and future customers, and by outsourcing production to the experts, we increased our content production by almost 10x over the course of the second half of the previous year. And we've maintained that level of production to date. We have done this mostly by having a team of only 2 full-time writers. We have agency time that comes in or out as needed. But again, this is a massive amount of production without a terribly massive amount of, investment upfront. Make it today, yes. So, this is great, and it might be all you need if you are a content marketing company, but if you are a company that sells things, you kind of need to know what impact this has on your bottom line. So, remember when I said decreasing NPS responses have a diminishing impact on your marketing efforts? Content has a multiplying effect on all your marketing efforts. So in terms of new users, we ended up getting lots of new visitors to the blog, up 300%, and we've been able to track how visitors to the blog then cascade down to visits to our core pages and therefore to sign up. In terms of search engine optimization, in the best of times, we have observed visits from organic search going up 50% month over month, which if any of you work in SEO and know how stingy Google is, this is really good. And then finally, in terms of paid advertising, we were experiencing exponential marginal cost per user. That has changed. Our spend potential has almost doubled and is maintained at that level leading into 2021. So definite cascading impacts on the rest of our marketing efforts. But it's not just marketing that benefits. This was probably the best example. Content also closes deals. Jamie had been trying to reach out to his client for weeks upon weeks to get her to start a Black Friday campaign. She was unresponsive until she start— until he started packaging up Black Friday-related content that we had written. Whereupon the client responded and said, "All right, thanks for sharing that. I'm super interested. How can we start?" Right? And content's not just useful information that your customers can use to educate themselves. Like, content also is really anything that brings joy. Our advocacy team packaged up this set of mental recharge offerings and just presence, letting our customers know we were thinking about them during these really tough times. And the response was wonderful. I mean, if you're talking about building goodwill, this is the definition of goodwill. And then finally, content also demonstrates expertise. This here is a, is a demo of a product that we have just launched. It's called the Return on Ad Spend Calculator. You can find it on adroll.com. But you— a company will put in their industry and some information about themselves, and we'll come up with an estimate on how much they should spend on advertising overall. Not specific to AdRoll, just if you're wondering how to think about trade-offs in terms of what you spend on advertising. This is— we took all of the knowledge that we had in all of our experience working with many, many different brands, and we put it into an easy-to-use calculator. So, uh, some key takeaways for all of you here. Uh, build relationships, right? Do this if you want to see step-level growth. A great product really only gets you so far. If a customer only sees you as a set of features, Sooner or later, other products will come along that do the same thing. You'll end up caught in an arms race. Some signs of a weak relationship include low volume of NPS responses, and also any accelerating or exponential costs of acquiring new customers— new users. How do you build great relationships? You treat everybody like they're already a customer. The acquisition funnel that puts the the customers at the end of a very, very, very long journey, it's dead. It's had its time. It worked for us up to a point, but we needed to evolve and change our growth tactics. The flywheel puts customers at the center of every activity that you do. And finally, invest in content that's not about you. That's how you do 1 and 2, right? You write about the topics that are already on their minds, give them the tools that they need to do their jobs better, customers will begin to believe and trust that you're on their side, you're a great partner, and the results will pay off. That's it. Thank you so much for your time, and we look forward to the breakout discussions.

Thank you so much, Julie. That was awesome, and excited to dig a little bit deeper in these breakout conversations, but it's always great to learn about the journey in the early days of Adderall, um, and the tips you learned along the way. So thank you. Um, sit tight, we are not done yet. So I'm going to trigger the breakouts and you will either be able to self-select or will get selected into one if you don't choose one.

Kaitlyn, I, uh, was prompted to join the metrics one.

Do you need—

okay, yep.

Where are you? Should probably go to the right session.

We, we just wait until we see a prompt.

Yep. Stacy, I'm assigning you right now. You should be good.

Jimmy, there you go.

I should have everyone here, I think. Jimmy, are you not Everyone has been assigned, so you might just have to click Accept in order to actually join the room.