#GROWTHSTORY How Help Scout Is Building a Great Business with an Uncommon Growth Playbook
With so much focus among startups on hyper-growth, it’s refreshing to see a company that deliberately chose a different growth trajectory and has been successful.
If you look solely at the numbers, Help Scout, the maker of help desk software, is a far cry from being an industry leader. While it boasts a roster of over 8,000 customers, which includes Buffer, Trello, Grubhub, and Basecamp, the largest companies in the help desk space – Zendesk and Freshdesk – have each scaled to over 100,000 users.
But for Help Scout’s founders, the vision has never been around having the largest customer base, highest growth rate, or a public company status. It’s been about building a great business.
In this post, we’ll take a look at how Help Scout has done it and carved a place of its own in a highly competitive market.
The origins: from agency to a SaaS product
Nick Francis, Jared McDaniel, and Denny Swindle founded Help Scout in 2011 with the mission of making great customer support achievable for businesses of all sizes.
Co-Founder and CEO Nick Francis
For six years prior to that, the founding team ran a web design agency in Nashville, Tennessee. Through their earlier side project Feed My Inbox, an RSS-to-email feeder, and work with online retailers and other agency clients, they recognized the need for a simple help desk that would make the customer’s experience as valuable and personalized as possible.
They built Help Scout to assist customer support teams and launched it while participating in Techstars Boston, a startup accelerator program.
Help Scout Techstars Demo Day Pitch
Starting off with a simple product
For many smaller businesses, other help desks solutions that were available at that time were too complicated and their setup required extensive customization. Help Scout saw the primary need for an easy-to-use product that would feel as a normal one-on-one email conversation, which is why its initial product was just a shared inbox.
It was an easy way for companies to scale their email support with a collaborative layer that was completely invisible to the customer. As Nick Francis explained at the time:
Focusing on one area allows us to do that one thing really well, and be versatile there, as opposed to offering 50 different features that just lead to a complicated and mediocre overall user experience.
Since then, Help Scout has added several features, but the core positioning of a simple help desk has remained unchanged.
How to grow profitably in a competitive market
Being part of a startup accelerator helped the company land its first customers. As Nick Francis attests in this interview, he went door to door in the shared office space at Techstars getting a few other startups to sign up for the product.
But how do you economically grow the product beyond a few customers in a crowded market? In particular, when you’ve made a conscious decision to be underfunded to avoid fast-growth compromises on your product and values and you can’t just write checks for customers.
Help Scout has decided to use a growth playbook that it calls a “long ball” because it requires time over money.
A big bet on content marketing
Help Scout bet on content marketing as its primary differentiator and growth strategy from the very beginning, and it proved to be the winner.
Within a year of starting the content marketing effort, the company went from having less than 10 customers to hundreds of customers, a newsletter with 30,000 subscribers, and tens of thousands of unique monthly visitors.
Most importantly, the playbook used by Help Scout resulted in lower customer acquisition cost, faster payback (1-2 months), and predictable and profitable growth.
Today, content marketing continues to be a major driver of user acquisition for Help Scout and accounts for around 60% of the company’s business, compared to 15-20% coming from paid ads.
Here is specifically what drives the success of Help Scout’s content strategy.
Delivering value, more value, and even more value
When it comes to marketing, Help Scout operates with a philosophy of earning customers through adding value to what they’re doing on a day-to-day basis.
The company put emphasis on writing functional content to help readers achieve customer success by elevating the role of customer support in their businesses and educating them about best customer support practices.
The content has a point of view anchored in the company’s values but isn’t associated with the Help Scout product. It’s not about selling but about building a brand that people can rely on and trust.
By producing content that is designed to build top-of-mind awareness of the brand rather than drive conversion, Help Scout is able to attract the right type of customer that values what the brand stands for and stays with the company for a long time.
And even if people who are consuming the company’s content aren’t looking for a help desk solution, they are likely to recommend the company when somebody asks them about a help desk.
What does this strategy translate into from an SEO perspective? Well, when you look at the highly converting keyword “help desk software”, the company ranks outside the top three.
But when you look at the awareness stage topic, such as “customer service”, it’s a totally different ball game. Help Scout is crushing it.
Researched and targeted topics
Ultimately, the goal of content marketing is to drive new trials and revenue. To make sure its content is well targeted and addresses the right topics, the company did two things.
First, Help Scout developed highly detailed and practical customer personas. It dedicated the time to understand its customers deeply, what they care about, what they read on a daily basis, and how the company can add value to their job on a regular basis.
By knowing what these personas search for, the company identified keywords to drive its content strategy. For example, this post it created on customer service skills ranks #1 in Google for this long-tail keyword and drives tens of thousands of unique visitors a month.
The second strategy involved experimenting with paid ads to identify content topics that would perform well. Analyzing what terms people actually clicked on and ended up converting with also helped inform the company’s content marketing strategy.
Today, customer feedback and keyword research are the guideposts the company uses to come up with new content.
When you look at Help Scout’s content, it’s simply inspiring: it’s well written and beautifully designed.
When the company started with content, it chose quality over quantity. For the first three years, the company published only one post a week.
How did Help Scout’s content stand out? Gregory Ciotti, who built Help Scout’s content marketing program from the ground up, adds this color:
We noticed quickly that the customer service space is filled with anecdotal content and personal stories. We decided to do the complete opposite, relying instead on consumer research on customer loyalty.
The company also produced several in-depth guides that were later repurposed into SlideShares, like this one.
10 Ways to Convert More Customers with Psychology
How do you get people to come to your site and read your great content when you don’t yet have an audience? Do guest posts. Help Scout took a page out of Buffer’s playbook and started writing posts on other blogs linking to its guides and embedding its SlideShares.
Once the traffic flywheel got going, the company needed to capture the audience into a subscriber list. Something it did from the start was to have its downloadable content entirely gated. It no longer is, but at one point this content was driving nearly 3,000 leads per month.
From there, the company stayed true to its philosophy of not selling but adding value by just sending great content to the subscribers. Getting a new post into the hands of people who already love your content is a great way to get it off the ground and gain shares and links, which then leads to new visitors and email sign-ups.
Over time, Help Scout’s strategy has evolved to include other types of content on customer service. For example, the company has introduced webinars on best practices in customer support in a discussion format that features outside experts and a Help Scout moderator.
Having built up a loyal following with great customer service content, it now also publishes interviews, product-related articles, and insights into how the company works.
To draw a great number of potential customers into the funnel, the company is experimenting with occasional “affinity content”. These are articles that address an area of interest for their target audience not directly related to customer service. These articles have performed well, such as this one on psychology of color in marketing and branding which generated over 10,000 shares.
The final key to Help Scout’s successful content marketing strategy is following a repeatable process that is driven by performance metrics.
Conversion through great product experience
Many companies do extensive A/B testing on the front end to drive visitor-to-trial conversions just to find themselves fighting churn on the back end.
SaaS is a long-term play. A/B tests can measure a short-term win but they don’t speak to the quality of the leads you are pushing through the funnel.
Help Scout found that there is more value in converting trials to paid users than in converting traffic to trials. At one point, an increase in the conversion rate from 8% to 11% helped it generate a $300,000 revenue increase.
So, how does Help Scout optimize conversion? Help Scout focuses on optimizing the onboarding process and providing a trial user with a great product experience because at the end of the day that’s what converts.
The company identified 4-5 conversion triggers in the onboarding process from the time a user signs up for a 15-day free trial until he becomes a paid customer.
It wanted to ensure the experience was as clear and smooth as possible. Through extensive customer feedback and testing, the company built a series of lifecycle emails and in-app messages that get triggered based on the user’s activity during the onboarding process that help move her to the next step.
Help Scout also drives conversion during the trial by delivering to the users the kind of experience that they would expect from the product. The company is able to do that because it made a decision to build fewer features and took the time to polish their craft, as Nick Francis highlights in this post.
Slow growth brings out something magical in SaaS companies. It bonds a team. It requires you to celebrate the smallest of victories. You get to know customers by name. Most importantly, it forces you to invest an irrational amount of time in polishing the product and making it great.
Retention driven by customer support DNA
Managing churn is critical for a SaaS business. Even small improvements can significantly impact the bottom line since the revenue is recurring.
Help Scout’s churn is less than 1%. How does it do it? Retention for Help Scout comes down to a few things.
First, proper onboarding helps reduce the churn. Help Scout puts churn in two different buckets: customers that were paying for less than 60 days, and customers that were with the company for longer. As Nick Francis points out:
If a customer churns in the first 60 days, we’ve essentially failed to onboard the company properly. They either can’t get team buy-in or aren’t seeing enough value to justify continued use of the product. In any case, it’s much easier to optimize for churn in this bucket.
Churn in the second bucket typically happens due to internal business changes that Help Scout can’t control, such as one or more features the customer needs as the business grows or ongoing challenges with the product.
To further facilitate proper onboarding and help users see value early on, the company has put out detailed video tutorials on specific product features.
It also offers basic and advanced classes that go beyond a simple demo and provide an opportunity for users to ask questions.
The other pillar of the company’s retention strategy is outstanding customer support which was built into the company DNA since the very beginning. Great customer support takes work, but there is no magic to it. It’s all about treating your customers well, listening to what they have to say, acting on their feedback, and building trust.
Being a customer champion and buying into the company’s mission are the foundational elements that the company hires for into its 50+ strong remote team.
Being in a highly competitive space, Help Scout needs to educate potential customers on the benefits of its product relative to alternatives. It’s what Hiten Shah and Steli Efti call “competitive marketing”.
Help Scout has put together several landing pages that are SEO-optimized to come up in the search results when people are looking to compare the company’s product against major competitors like Zendesk, Freshdesk and Desk.com, as well as other alternatives, such as Outlook and Gmail.
These pages avoid side-by-side comparison other than on price, instead providing customer testimonials and highlighting features that are relevant to the user considering each particular alternative.
Building a growth team
Content marketing had worked well for Help Scout, but it needed to move away from betting its business on one channel.
To help identify those new avenues for growth, the company last year brought in Suneet Bhatt as a Chief Growth Officer. Under his leadership, the company unified marketing, sales, and customer success into one Growth team.
These functions are viewed as active partners in contributing to the company’s growth, and everyone on the team, including sales, is compensated the same way. Suneet Bhatt shares his reasoning:
If you want to build a sales team that’s with you for the long haul, that has its incentives fully aligned with your company’s goals, that is focused on collaborating in support of the customer experience not in pursuit of a bonus or commission dollar, that is inspired by higher-level thinking and problem solving, you move away from a traditional commissioned model.
Key takeaways from Help Scout’s growth journey
- Content marketing has enabled Help Scout to successfully compete against big players in the space and get in front of potential customers without relying on costly paid channels.
- Help Scout stuck with a strong channel it could excel in instead of spreading itself too thin on multiple fronts.
- Building a great business is not always about hyper-growth, but about making a world-class product, championing your customers’ values, and sustaining your focus over a long period of time.
What’s next for Help Scout?
Help Scout has built a great brand in the help desk space, and it has done so in an authentic and humble way. The company has not tried to conquer the world but has defined its unique place in the market.
From a product perspective, the company needs to address customer expectations of moving beyond old-school customer communication channels like email and phone into more contextual channels, such as chat and other in-app solutions. AI is another development that needs to be watched.
On the strategy side, Help Scout will most likely stay on the organic growth path but will probably look to amplify its efforts in other acquisition channels, such as SEO and referrals.
It’ll be truly exciting to watch how Nick Francis and his team continue on a mission to help its customers build their own great companies.
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