Posted by AndrewDumont
Early on, we made the decision not to grow a sales team at Moz. We're not anti-sales, per se, it's just that it does't fit our culture. We believe in practicing what we preach—inbound marketing—not interruption selling.
Consequently, that provides a bit of a problem for a B2B SaaS business like Moz. Growing through traditional inbound channels is immensely powerful, but at a certain scale, maintaining linearity in growth through content, social media, and search becomes difficult. Working with the role of Business Development at Moz, it's my job to find those channels that will introduce growth at scale in a predictive way.
Which brings me to distribution.
Just over two years ago when I started at Moz, we began to ponder a simple question: If we offered an extended free trial on Moz (45, 60, 90, or 120 days) to select partners, could it move the needle on growth?
Before we'd be able to answer that question, however, we needed a few assets. The first was what we call a "partner page" internally—a lander that factors in a coupon code at check-out and offers a soft entry point from a third-party site. An example of that can be found below, which was shown in a recent partnership we launched with Get Startup Tools. It should be said that this is not an ideal partner page. There's much to be tested in the way of alternate text length and incorporating partner logos, which have proven to bump conversion in relevant studies.
Next, we needed to find something to provide our partners with value outside of the extended trial period that they'd be offering to their community through the distribution. This brought us to the concept of a "perks page," a collection of top web services that we could offer to Moz subscribers at discounted price, in a sense offering what we were looking for in return. With these two assets in place, were were ready to go.
Which brings me back to the question I teed up for myself originally. Yes, it could move the needle on growth, but how much? Let's take a look. Below is a breakdown of free trials and paid conversions that have come directly from the distribution channel since January of 2012.
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Looking at these numbers, however unsophisticated the graph may be, it begs another question: Sure, the numbers are growing, but do they perform as well as organic free trials, or do they churn out at a higher rate? Below is an analysis of just that, comparing conversion rates and churn of organic trials versus distribution trials, broken down by month in their subscription.
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As you'll notice, month 0 and 1 are much higher than organic, but it then regulates out to something more manageable, a rate very similar to that of organic. Oddly enough, when we looked at trial length and the corresponding conversion rate, it didn't increase with length. Out of a fairly large sample set of 45, 60, 75, 90, and 120-day trials, the 60-day trial performed best by far. Counterintuitive, to say the least. From a holistic view, the conversion rate was lower, but not by an insane amount.
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Now, back to that needle. How much revenue—real money—have distributions brought in? As of August 1st, 2013, we generated roughly $139,788 in revenue on a monthly basis through the distribution channel, or $2.3M in revenue since the channel was created in January of 2012.
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Not bad. But I haven't even brought up the most amazing part of distribution: acquisition cost. Each one of these users that came through our partners via distributions came to us with $0 in acquisition cost, which is why step two of the legwork I mentioned was so darned important. By offering value back to our partners through their inclusion in our perks page, all of the numbers listed above were acquired without a rev-share or acquisition cost. The only spend was in the form of an increased operating cost from the extended trail. The hottest of damns.
That's all and well for Moz, but how can you apply it to your business? Well, regardless of your business, it's definitely worth adding to your tool belt as one of your 21 tactics, but it's typically best-suited for SaaS businesses like Moz.
If you're a service provider, you'll likely have to get a little bit more creative. Though it's not a direct corollary, the closest comparable in the service world would be a partnership with a software product like Moz, wherein Moz becomes a recommendation engine for new clients. You can see this in practice through our partnership with Distilled. For most software companies, they don't want to derail focus from the product through consulting work, so there's a lot of value to be added in becoming that missing consultation piece.
Regardless, the same concepts apply. Provide value and receive value; that's the nature of any partnership. Yet for some reason, partnerships typically aren't thought of as a growth channel in the inbound marketing mix, when they can clearly have an impact.
Hell, in this example, they even build links, if you're into that sort of thing.
A huge thanks to Alyson and Kurtis for making all of this data possible, both for our internal analysis and for the sake of this post, they employed some serious mySQL-fu.
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