Flipping the Funnel with Klaviyo CMO
If you’ve ever wondered how much a CMO can do in a year to change the trajectory of a company, this is the episode for you. Enter Kady Srinivasan, who has kicked things up a notch at Klaviyo, a marketing automation platform dedicated to helping its customers discover a new, more effective way to grow their business.
Grow their business how, exactly? By flipping the funnel on its head, focusing on the bottom first, which has resulted in something like 65x higher ROI for Klaviyo customers. In this episode, Kady shares how the brand developed this new positioning, using it as a centerpiece to unite employees, customers, and prospects alike. Tune in to learn how they made their refreshed brand come to life in a myriad of ways, as well as how Klaviyo measures marketing, and more.
What You’ll Learn in This Episode
- How Klaviyo refreshed its brand strategy
- How Klaviyo brought its new brand to market
- Kady’s 5 key marketing metrics
Renegade Marketers Unite, Episode 283 on YouTube
- Renegade Marketing: 12 Steps to Building Unbeatable B2B Brands by Drew Neisser
- Playing to Win: How Strategy Really Works by A.G. Lafley
- RMU #76: 3 Tips for Your Next Viral Marketing Campaign
- RMU #105: “Fearless” Marketing and the Power of Storytelling
- Klaviyo Product Event
- Klaviyo Benchmarks
- [0:00] Cold Open: Renegade Marketing: 12 Steps to Building Unbeatable B2B Brands
- [1:06] Courageous B2B Brand Strategy at Klaviyo
- [6:27] How Klaviyo Refined its Brand Story
- [12:10] Artful Ideation: How Klaviyo’s Marketing Team is Driving Focus and Creativity
- [19:21] Thoughtful Execution: How Klaviyo Rolled out its Refreshed Brand
- [23:02] Klaviyo’s Data Privacy Campaign
- [27:23] Klaviyo’s Pop-Up and Product Events
- [32:38] Scientific Method: Klaviyo’s Marketing Metrics
- [43:06] Kady’s Tips for CMOing
Transcript Highlights: Drew Neisser in conversation with Kady Srinivasan
[0:00] Cold Open: Renegade Marketing: 12 Steps to Building Unbeatable B2B Brands
Drew Neisser: Hey it’s Drew! You may know that I have a new book out called Renegade Marketing: 12 Steps to Building Unbeatable B2B Brands that is now available on Amazon in hardcover, paperback, ebook, and audio. Steve Starner, the CMO of Goodreads, put it in his top five books of 2021. And no, I didn’t pay him. And yes, he reads a lot of books. Speaking of reviews, I have a special limited time offer for listeners of this show. Ping me on LinkedIn, and I’ll send you a PDF of my book and if you write a review, I’ll send you an autographed paperback. Okay, let’s get on with today’s episode.
[1:06] Courageous B2B Brand Strategy at Klaviyo
“We started to map out the how to win: What are the specific levers and marketing tactics that are going to make us uniquely successful and give us a competitive advantage?” —@KadySrinivasan @klaviyo Click To Tweet
Drew Neisser: Hello, Renegade Marketers. If you’ve ever wondered how much a CMO can do in a year to change the trajectory of a company, you’ve come to the right place.
Need a new brand story? No problem! Need to refine your category? Check! Need to redirect product marketing? Of course! Need a fully integrated marketing campaign that builds awareness and drives leads? Why not?
To go through all of these things and more, I’m thrilled to introduce you to Kady Srinivasan, the CMO of Klaviyo. Hello, Kady!
Kady Srinivasan: Hello, Drew!
Drew Neisser: How are you?
Kady Srinivasan: I’m doing great, after that introduction—wow, I’m doing fantastic!
Drew Neisser: Yes, we have a lot of ground to cover. But beforehand—and I need to do this, I have a few North Carolina friends and I just want the audience to know that even though we went to schools that had different shades of blue, very different shades of blue, and you’re on the wrong side of that in North Carolina…
Kady Srinivasan: Highly, highly debatable. Yes.
Drew Neisser: I just want you to know, I’m over it. But seriously, for the listener, because I don’t think I’ve ever told this story on the show about how ingrained the animosity is between Carolina and Duke. I know you’ve seen the basketball games and so forth. But imagine, at my graduation many moons ago, some clever grad strung a contraband banner across the football stadium—we’re all gathered there—that said, yes, “Go to he*ll, Carolina. Go to he*ll.” It’s just part of who we are.
Kady Srinivasan: Very true.
Drew Neisser: But nevertheless, we’re all in the ACC. We’re all friends here. And we’re bigger than this, right? We’re bigger than this silliness of dark blue versus whatever baby blue.
Kady Srinivasan: It’s just our blue is nicer. That’s all.
Drew Neisser: Yeah, so there it is. We’re moving on. As I said, we’re bigger than this. So, I have this book, Renegade Marketing: 12 Steps to Building Unbeatable B2B Brands. I talk on the show a lot about the CATS framework, which we be bring to life in the book, and increasingly on the show. So, we’re going to start, Part One is Courageous Strategy and Clearing Away the Clutter. Let’s go back to how you assessed your problem at Klaviyo when you got there.
Kady Srinivasan: Yep. I have been very inspired by this framework by A.G. Lafley—I forget the name of the book, [Playing to Win: How Strategy Really Works] but essentially the framework is you really just focus in on identifying where to play, how to win, what are the measures that you want to focus on, and the—he calls it coordination.
I took that and I created my own framework, so the where to play became, where are we going to focus; on what kind of segments, markets; what is our ICP; and got really, really, really clear on that.
Then we started to map out the how to win: What are the specific levers and marketing tactics that are going to make us uniquely successful and give us a competitive advantage?
Then I actually added a third step to that, which was: scaled communication. We want to be able to talk to the right customer with the right message in the right channel, but it’s not enough to do that. You have to talk to them at the right time with the right frequency.
There are five components to it, so I added that piece in and then we have the measurement and the coordination.
Drew Neisser: Okay, let me break this down for a second. First of all, just in case, if my dad’s listening and he says, “What’s an ICP?” I will say, “It’s an ideal customer profile.” Let’s just start with where to play. What did you figure out?
Kady Srinivasan: Yeah. It’s a great question. So, you know, most companies start with a very basic segmentation, which is based on something that they can measure. With Klaviyo, for instance, our segmentation is based on how much revenue does a customer generate? For other companies, it could be how many licenses does a customer buy? Or how many employees do they have?
Really tangible metrics. What we did was we went one step further and said, “But it’s not enough for us to have just a tangible metric. We need to get into the minds of customers.”
So, what is that attitude mindset? We created a segmentation based on personas of where people stand in their journey and their understanding of this problem set that we are trying to focus on.
Klaviyo is a company that provides email and SMS services, but we have a customer data platform. For us, it became very interesting to find out what do people think about email and SMS marketing? And how does that cluster people? That became the basis for our “Where to play.”
Drew Neisser: Okay, so when you dug into this… And it’s funny, because I rant a little bit about personas, and it’s not that I don’t think you want—you need to know the customer really well. It’s not that. It is that when I see personas, sometimes I’ll see 14 personas, and they’ll create separate scripts and when you read those scripts, it sounds like the company is a different company to each of those personas.
Kady Srinivasan: Yeah.
Drew Neisser: And that’s one of the reasons in my opinion that marketing got more complicated, but not more effective. So, I know personas are not the problem, but they are often used in a way that creates a problem.
[6:27] How Klaviyo Refined its Brand Story
Drew Neisser: So, what did you learn? Where was the insight as you’re getting into this to help you refine your brand story?
Kady Srinivasan: Yeah, it’s a such a great observation. The personas can be used as a crutch to want to do everything and to want to be everything to everybody, whereas the personas should be a way to really laser focus on what is your one truth that can actually cascade to everybody that you talk to in some way, shape, or form.
For us, we quickly realized in doing that persona development that there were differing attitudes to how people thought about growth, how they grew. That coupled with my experience and some customer insights I’d done, we quickly landed on this idea that, look, we are here to help teach you how to grow better in a different way.
What I mean by that is, as marketers, we tend to have one playbook, which is: Go look at the top of the funnel, expand the top of the funnel, bring people in, and then hope to god that they stick through the funnel.
But we are coming in and saying “No, no, no, actually our customers have proved that it’s completely opposite.” Our customers have said, “Let’s fix the bottom of the funnel first, and then go to top of the funnel acquisition.” And, man, they’re growing crazily. Their ROI is like 65 times higher than others, etc., etc.
The one big insight that came out of it was: There is a new way to grow, and Klaviyo is uniquely positioned to help companies drive that growth. That became the way we thought about categorically reframing that became a brand pillar, that became our key tenet for positioning. That just became the one source, the one distilled truth, that’s important for everybody.
Drew Neisser: That there’s a new way to grow.
Kady Srinivasan: Yep.
Drew Neisser: And it’s just flipped the funnel.
Kady Srinivasan: Yes.
Drew Neisser: Get the bottom right and good things happen.
Kady Srinivasan: Exactly. Yeah.
Drew Neisser: How do you articulate that ultimately?
Kady Srinivasan: Yeah, so that’s a great question. Almost like in parallel, the work that we had to undertake was defining the customer journey and the parts of the funnel.
Marketing, you have to be able to talk to different people at different points of time in their customer lifecycle and you have to make sure that you’re graduating people down the funnel throughout the time.
We did a bunch of work in mapping our customer journey, coming up with those specific phases, and we realized a lot of people understand that there is a new way to grow. For them, we don’t need to talk about the problem set anymore. We just want to talk to them about the solution set.
But there are a lot of people who are kind of still in that paradigm of, “Man, I really need SEO, I need PPC to grow.” And for them, we have to go and actually educate them and say, “No, no, no, hang on a minute. There’s a new way to do things.”
So, we customized our content and communications to address different parts of the funnel so that people were receiving the right messages for what they wanted to hear.
Drew Neisser: Interesting. But nonetheless, it’s all still, as you said, there’s still one truth holding these things together, right?
Kady Srinivasan: Yeah.
Drew Neisser: Which is there’s a new way to grow.
Kady Srinivasan: Yep.
Drew Neisser: Okay.
Kady Srinivasan: And that cascades down the funnel. So, if I’m talking to one of my customers deep at the bottom of the funnel, what I’d probably tell them is, “Look at the comps, look at the customer stories, look at the proof points,” rather than trying to educate them about this new way to grow.
Drew Neisser: One of the things as I’m thinking about this is, is this a new way for you to grow?
Kady Srinivasan: For me personally, or Klaviyo?
Drew Neisser: Klaviyo. In other words, are you drinking your own champagne?
Kady Srinivasan: It’s a great question. I wish we were further along on that journey, but we are not. We have been so focused on creating this perfect personalization at scale machine for our customers, that we actually haven’t turned that lens inward and said, “Wait… Are we giving that same personalization at scale to our customers? Are we living the truth? Are we walking the walk?”
We just started that journey last year. We said, “We need to make sure we are doing everything that we want our customers to do.” I know we will get there. I wish we had been a little bit further along.
Drew Neisser: Okay, that’s fine. But it is a realization. I mean, particularly when you’re marketing to marketers, you’ve got to be good at what you’re doing, and you’ve got to be a leading practitioner of that. Would you say that Klaviyo is a purpose-driven organization?
Kady Srinivasan: It is. Our vision is: “We enable creators to own their own destiny.” And that can take a lot of different forms.
We have a very broad definition of what a creator means. Destiny, obviously can be so many different things: Legacy, success, money, society, all that sort of stuff. And so everything that we do, we keep that as an anchor or a focus point and say: “Why are we doing this? What’s the end customer benefit?”
And we have so many customer stories. One of our customers is a single mom who quit her job and she started a business, used Klaviyo, and she now has, you know, she tells us she has safety and security because of Klaviyo. That’s a big difference. When you think about mission-based, there aren’t a lot of things that you can do that drive that kind of mission statement and impact on society.
Drew Neisser: Yeah, that’s a wonderful thing. I mean, when you transform a small business and help them succeed and help them think about their business—and it’s interesting, you really are, as so many marketing service providers are, it’s not enough to have software.
Kady Srinivasan: Yeah.
Drew Neisser: Because, you know, there’s lots of software out there.
Kady Srinivasan: Yep.
Drew Neisser: But it’s that you really have to figure out what can you do? I talk about that as selling through service and we used to use the term marketing as service—it’s how do you help and that’s fundamentally the realization that you came to and your whole business is built on to teach people how to grow better.
[12:10] Artful Ideation: How Klaviyo’s Marketing Team is Driving Focus and Creativity
Drew Neisser: As we move into Artful Ideation, I’m curious, as you were doing this, what kinds of things did you do internally to make sure that employees understood it and could embrace this and would feel good about it?
Kady Srinivasan: There are quite a number of different things. But I think I’ll point to a couple of very, very specific ones. We are in the process of relaunching our brand and it was very important that we get alignment within the company on that, both from the broad set of stakeholders as well as very specific customer facing functions such as sales, customer success, and support. Because they are on the front lines, they get so much feedback.
We have done a ton of work in aligning the company around what is our rebrand refresh strategy. Why do we want to do this? What’s the intent of this and how does it come to life? I think that’s been a big one for us to get to some level of cohesion.
The second thing I’d say is: We are a little bit of a unique platform in that we can actually grow in many different directions. The platform itself is so scalable and so extensible, that we have no dearth of different strategic areas for us to move into. What that has led to is, “Oh, let’s do all of the stuff.”
One of the things I think marketing has done a good job of saying, “Hey, guys, let’s focus based on customer insights and other things. This is the story; this is who we want to go after. We can do all of this other stuff but let’s land this thing first.”
I think that’s brought a lot of clarity and a lot of focus to many parts of the organization. I’d say the third thing is, we are incredibly both data driven as well as creative. It’s hard to find both in one team, but I’m really grateful that we have those bodies of people.
There is this really strong push and pull all the time of “Wait, no, we want the homepage to be about brand. No, we want the homepage to be about conversion.” That kind of creative tension has been, I think, inspiring for the organization to have more of those. To be able to say, “No, no, no, we can actually find a middle ground.”
You need that kind of creative tension all the time. I’d say those three are the things I would point to.
Drew Neisser: Yeah, and I’m going to editorialize a little bit. I did an interview a couple years back with a CMO who had an incredible viral video program that had gotten millions and millions and millions of views. It was so fun, and it used the product to create the video, so it was like a demo in and of itself.
The web people and the demand people said, “No, you can’t put that on the homepage.” So, you had this whole group of creative community who were all excited about this and there was no connection.
The argument was, we tried it and the response rate went down. The problem with that thinking is that you’re basically saying I’m going to convert people based on just price and function.
Kady Srinivasan: Yeah.
Drew Neisser: So, you don’t get the loyalty that you get from an emotional connection that these videos were creating.
Kady Srinivasan: Right.
Drew Neisser: And so, yeah, you might have lost a little yield, maybe. But the upside—and this is why the measurement in this thing is so important… If you’re measuring lifetime value, then you start to think about retention and the type of customers to get, not just the ones who close on that minute because of the right price at the right time.
Anyway, that’s me editorializing on why these two things need to be together. And it all comes down to are you focused on the right metrics, right?
Kady Srinivasan: Yeah, exactly.
Drew Neisser: And that’s way back in the end of this conversation when we talk about Scientific Method and what you measure. But it matters. It matters up front strategically because you know if you’re a CMO and you’re only going to be measured on top of funnel demand, then that’s all you’re going to do and you’re not going to have this battle.
Kady Srinivasan: Yeah, yeah.
Drew Neisser: Lastly, before we clear this, you mentioned about the educating employees. I’m curious, how long did you take? Some companies have certification where you have an exam you have to take to learn the brand. What energy and did you do anything creative to help employees understand what this new brand was about?
Kady Srinivasan: I don’t think we’ve done anything that programmatic and on that kind of scale. We’ve done a lot of different more targeted education in smaller pockets bringing people along. I think as we continue our brand evolution, to your point, I think there is an opportunity to continue to get people on board.
One thing I should mention—it’s not just the brand, it’s the story of the category. The one truth that I talked about. It’s using that truth to communicate, “This is who we are, this is what we’re going to talk about, here’s how we are going to talk about ourselves.”
There’s been a lot of different streams of communication to take that message to the employee base. I think as we continue to evolve, we will do more of that stuff.
Drew Neisser: Yeah, and I just have to say, I find—and this is particularly true at startups. In smaller companies, there’s usually not enough time spent training employees, showing why it’s meaningful, and actually connecting that new promise with performance where there’s an education program and they get that this isn’t just words on a page…
Kady Srinivasan: Yep.
Drew Neisser: …but this is a commitment of every employee. This is why I love marketing, but other people who don’t really understand all the things that marketing can do. Marketing can transform an organization.
Kady Srinivasan: Yep. 100%.
Drew Neisser: Right? It’s not just words on a billboard. It’s changing behavior. And as you’ve talked about it, and this is the journey that you’re on is you are helping the company catch up with your promise.
Kady Srinivasan: Yeah.
Drew Neisser: And by the way, just again, another bit of editorial. It is okay if marketing gets ahead, because it forces the company in some ways to catch up.
Kady Srinivasan: Right.
Drew Neisser: And that’s okay. Even if it says somewhat controversial. One of my favorite stories of all time is the State Street Global campaign where they did with The Fearless Girl, the little statue, and they made a commitment to get women on boards of directors, and they did this whole outreach.
Well, then the light turned back on them, and they realized, “Oh, wait, we don’t have as many executive programs as women in the thing.” So they had to make adjustments. That’s okay. Anyway, we need to take a break, and when we come back, we’re gonna get into some more of the execution. Stay with us.
Show Break: On CMO Huddles
Drew Neisser: If you don’t mind, I’d like to plug CMO Huddles for a second. Launched in 2020, CMO huddles is an invitation-only subscription service that brings together an elite group of CMOs to share, care, and dare each other to greatness. One CMO described huddles as timely conversations with smart peers in a trusted environment, while another called it a cross between an expert workshop and a therapy session. If you’re a B2B CMO that can share and care with the best of them, either hit me up on LinkedIn, or visit cmohuddles.com to see if you qualify for a guest pass.
[19:21] Thoughtful Execution: How Klaviyo Rolled out its Refreshed Brand
“You want to create a surround sound of your message through all the different channels so that people are able to not only recall your brand but recall your brand for the right reasons.” —@KadySrinivasan @klaviyo Click To Tweet
Drew Neisser: We’re now in the execution land and Thoughtful Execution, part three of my book, but talk a little bit about the sequence of communications and how you rolled out this new idea.
Kady Srinivasan: Yeah. I do want to address; the marketing is basically serving two constituents: The employees within the company like you correctly identified and then also the market itself.
So, when we talk about rolling out these communications, to some extent, the internal constituents are easier because they are more homogeneous. There’s one body of group who’s really into the mission and who wants us to succeed.
I think the harder one is rolling out communications to that market, to the segments. We’ve been doing a lot of different things to make sure that is really, really coordinated, systemic, and consistent.
I talk about this idea of creating a surround sound. What I mean by that is, if you go to the market with a certain message, you want to create a surround sound of that message through all of the different channels that you can so that people are able to not only recall your brand but recall your brand for the right reasons.
Because it’s not just enough to have a brand. It’s very important to have the right brand associations. And so, we’ve been doing a lot of work to create the brand, get that out there, create the right associations, and then be able to take those associations and take that interest that we generate and move people down the funnel obviously educating them along the way.
Drew Neisser: I totally love the brand and the associations and all of that makes sense. I agree with you that employees are the easiest target because you know where they are, and you know who they are. But it’s funny how often, one, companies forget about them, and two, take them for granted, and three, don’t actually involve them in the process at all.
Kady Srinivasan: Yeah. Yeah.
Drew Neisser: It is a good reminder that they are, because if they don’t believe in the new promise, it’s going to fail.
Kady Srinivasan: That’s right. Yeah.
Drew Neisser: And so that’s part one. And then the second thing that we didn’t talk about, and I’m just wondering if this was part of it. In the book, I talk a lot about how the next target after employees are customers. Because if they don’t believe in the new promise, if you are saying, “A better way to grow,” and they’re not growing or they’re not feeling it, then your testimonials are going to be kind of lame.
So, talk a little bit about how, if at all, customers played in your new marketing?
Kady Srinivasan: Yeah. Customers play a huge part. I think that we would not have been able to come up with this positioning and strategy if we had not talked to customers and gotten that raw feedback.
We make sure that customers are always part of any sort of marketing program that we build up. For us, customers are even more especially important because we have different kinds of customers.
There are the people who use a product for free, there are the people who pay us, there are the people who use more than one of our products. And so as a business and as a brand, it is very important for us to not only keep them motivated and happy, but surprise and delight them, which is kind of the next level of customer satisfaction.
To your question, we work a lot with both customers directly as well as customer facing teams like sales and customer success to make sure that community of customers we have, which is, quite frankly, probably the most valuable asset we have, is really well taken care of and that we are constantly making sure we have products that fit their needs.
Drew Neisser: Right. I’m so glad you mentioned the free product because it’s such a competitive advantage always when you can get customers into the pipeline by offering a free experience and help them get to know you and then move them up the pipeline.
[23:02] Klaviyo’s Data Privacy Campaign
“My barometer of success is when your competitors start copying your terminology and we immediately saw a few people start to use customer-first data and data privacy.” —@KadySrinivasan @klaviyo Click To Tweet
Drew Neisser: Now I want to get to this surround sound idea, and I love it. But talk specifically maybe about some of the programs that you did.
Kady Srinivasan: Yeah. So back in July, we came up with this idea of running a data privacy campaign. The whole genesis of that was two things. We have to create an integrated campaign that’s very culturally relevant and contextual because that’s the best way for us to break through this whole clutter and then really resonate with audiences.
And then the second part of it is, we have to make sure that all of those messages resonate across all parts of the funnel. Because if you were to just go in with a brand campaign and do nothing else, it’s just going to be a lot of stuff out there that doesn’t get connected to actual things.
We came up with this data privacy campaign and the whole premise of that was: “We are here to tell you that you don’t have to rely on third party data. I mean, you have to some extent, but that may not be the entire thing. You can and should focus on what we call customer first data.” That’s a term I coined that basically puts together this idea of zero party data and first party data.
And just a quick sidebar, I was like, “Why are we calling it ‘party data?’ Just call it customer first data.” We pushed for this idea of: “It’s all in your control. This is about what you own. If you own more customer data, more points, more frequency, more fidelity of information, you can do a lot of stuff with it. You don’t actually have to go rely on expensive third party and be at the whims and fancies of these third-party platforms like Apple and Facebook and their ever-changing algorithms.”
That was a big success. It moved the conversation quite wildly in the direction of “Gosh, what are we actually going to do with all of this privacy stuff?”
In fact, I think my barometer of success is when your competitors start copying your terms and terminology and we immediately saw a few people start to use “customer first data” and “data privacy” and things like that. I think we notch that as a success.
Drew Neisser: Yeah, no, I agree with you. I mean, it’s the old definition of a category. It’s not a category until you have competitors and it’s not an idea till somebody really copies it. I can connect the dots from privacy to a new way to grow, a new way to think.
The way I’m guessing that it connects is, there was fears that you wouldn’t be able to continue to grow your business because you wouldn’t be able to get extra data out there because of the changing privacy rules.
Kady Srinivasan: Yeah.
Drew Neisser: And so, first party data becomes the most important because if you own it, you can use it, assuming that you have permission. I’m assuming that’s how this fits into the…
Kady Srinivasan: …new way to grow?
Drew Neisser: Yeah.
Kady Srinivasan: Let me… so, you know, the new way to grow is dependent on this idea of “flip the funnel” that you mentioned earlier. Which is basically, I’m saying, don’t start with the top of the funnel.
Shore up your bottom of the funnel first with your engagement programs, loyalty programs, all that kind of stuff, good stuff, cart abandonment. And then go look for top of the funnel. In a world of flip the funnel, though, you have to rely on data.
You have to rely on customer data that tells you, “Man, this person has abandoned this cart. But in the past, they have bought this particular thing at this time from this catalog. And now I’m going to send them a very specific targeted offer to get them back in the funnel.” You would not be able to do that with third party data.
Drew Neisser: Right.
Kady Srinivasan: Because you just don’t have that access. The new way to grow is very highly dependent on owning your data. What data do you own? Customer first data. And by the way, zero party is the stuff that people reveal about themselves to you. So, if they come on your website, and you say, “Give me your color preferences,” that’s zero-party data.
First party is the data that you observe about customers that come to your website. So, they clicked on this, they went here, they did this. You combine the two and you suddenly have a rich plethora of information that you can use to say, “Drew, I know you bought this pair of shorts from this catalog three months ago in the LA region. I predict that you’re going to buy another pair in the next six weeks, here’s like 50 points for you to go do it.”
None of that would be possible if you didn’t have a lot of things—which includes, by the way, a plug for Klaviyo, you wouldn’t be able to do that without the capabilities Klaviyo provides in terms of database and other things. That’s how it all connects together.
[27:23] Klaviyo’s Pop-Up and Product Events
Drew Neisser: So, I seem to recall, you did something kind of cool in Boston, right? Didn’t we talk about that? Am I making it up? Something to do with a pop-up store?
Kady Srinivasan: Yes, we did. We actually invited many of our customers to come and actually have a store. Then we showcased all of our customers. Many of them are small entrepreneurs, mom and pop stores who, for them, discovery is a big problem. They want to be discovered, so this was a perfect opportunity for them to come and showcase their products and their wares.
It was just fantastic. We had people from all over Boston walking through the seaport checking out our customers products. This was just very satisfying.
Drew Neisser: And how long was that program?
Kady Srinivasan: I think it ran for a weekend last year.
Drew Neisser: Just a weekend.
Kady Srinivasan: Yeah.
Drew Neisser: But I’m imagining that you got press. What I like about this, talk about thoughtful execution, is: First of all, you’re showcasing customers. Two, you’re bringing customers together. Three, you’re creating a PR exposure for the brand. So, it’s good for your customers and, by the way, employees feel kind of good about it because it’s cool, it’s different.
Kady Srinivasan: It is cool. That’s right. Yeah. It goes back to your example about the viral video. It doesn’t actually take a lot of effort to create something that can have a big impact. So sometimes the small things actually are good and meaningful because they can have long term impact.
Drew Neisser: Right. And it was consistent with the overall story of—
Kady Srinivasan: our brand principles. Yep, that’s right.
Drew Neisser: Was there anything else, before we move on to measurement and so forth, in the things that you’ve executed under this data privacy plan to create this? Can you talk a little bit about any of the other program elements?
Kady Srinivasan: Yeah, and the one big one that I want to mention is, when I came on board, we started to do this thing called Klaviyo Product Event. The idea behind the Klaviyo Product Event was, we realized that a lot of our customers didn’t actually know all the amazing features we had.
For instance, I actually was surprised myself, we have this thing called Benchmark, which is, if you’re an e-commerce business, you can go into our platform and then be able to say, for companies who are in my sub-vertical who are growing at a certain rate, give me the average CTRs or the average lifetime value, AOV. It’s incredible.
That kind of data does not exist anywhere. We found it really surprising that most of our customers didn’t know that existed, which helps their business. We created this product event. We do that every quarter and it has been a tremendous way to showcase how do you use customer first data in a world of changing privacy to drive your business, and here are the specific things that you can do with the Klaviyo. As you can imagine, huge lift. Anytime you put on an Apple-esque kind of event, it’s just a ton of work, but we’ve been consistently able to get that those beats out in the world.
Drew Neisser: Well, it’s funny, as you were talking, I realized that, you know, when COVID began and the shutdown began, the real playbook was going back to your customers and doing whatever you could to be helpful to them.
What a lot of companies, particularly software companies, discovered is that their customers were only using 10% of the capability of the product. It’s interesting that you made that an important part.
But if you think about, again, we go back to: How are you building your brand? Well, you’re doing it first with your employees and then with your customers. If you have customers that are using the product, but not using everything, that’s a missed opportunity because their level of satisfaction is nowhere near what it could be if they were using it.
I think it is an assumption that I just want to put a really big explanation point on—exclamation point on—maybe exclamation point, different kind of point. Don’t assume that your customer knows how to use your product to its full extent.
You’re a software company, there’s a good chance that it’s a person who’s a year out of school who is using the tool, or this is only 1/50th of their job. And so, you really educating them and also, again, it comes back to your overall mission, which is to help these guys grow. Okay, we’re going to take another break and then when we come back, we’re going to wrap up with some lessons learned, some metrics, and so forth. So, stay with us.
Show Break: B2B Market Research Services at Renegade
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It’s a lot to ask for market research, which is why more and more B2B companies are coming to Renegade for help in this area. Renegade will help you craft the questionnaire, field the research, analyze the votes, and even write up and design the report if your in-house team is too busy. If you’re a B2B CMO even thinking about market research, do yourself a favor, visit renegade.com and set up a time for us to chat.
[32:38] Scientific Method: Klaviyo’s Marketing Metrics
Drew Neisser: Part four of all this—we’ve got a really strong strategy which we’ve established; we’ve been artful in the way we ideated. You mentioned this notion of this conflict between data and brand and that’s part of the artful ideation process is recognizing that.
Then we talked about thoughtful execution and your whole program is about helping your customers grow. That is inherently thoughtful. Putting them in the pop up did that, and these quarterly things you talked about.
But at the end of the day, every CMO has to be able to go to their board of directors and say, “Here’s what we got done.”
We’ve been talking about demand and brand, so let’s talk about—when it’s a board meeting, because there’s always one every quarter, what are you presenting? What metrics do you typically share?
Kady Srinivasan: I am in a unique position where I’m both the head of marketing as well as a GM for a couple of lines of business. I start with presenting the numbers, the revenue numbers and how we’re doing pacing versus forecast, target, all that kind of good stuff. But then I think I get the unique opportunity to say, “The ARR numbers are always lagging indicators.”
Now, let’s talk about leading indicators because leading indicators are then going to tell you what we look at, how we’re going to shape up for the next quarter, not this current quarter. They’re things like, obviously, website visits, MQLs, SQLs, all those kinds of things come into the play.
We also have two different motions, sales enabled and self-serve. There’s complexity there in terms of what the self-serve motion is in terms of metrics and so on.
Then I think, for me, the more interesting part is: Even beyond website visits, we track unaided and aided recall on almost like a religious basis. We track it every quarter. A lot of things that we do tend to go towards helping drive that number on a quarterly basis.
You can imagine the funnel starts from unaided recall and then, you know, I talked about brand association. There’s some element of brand preference, website visits, MQLs, split into those two funnels and finally, ARR, which also includes ASP. So, the full stack. It’s a pretty packed meeting, generally.
Drew Neisser: Yeah. And it is interesting that you have the GM and that’s so helpful because you can just say, “Look, revenue. See, I know you guys like that. Good. Look over at the revenue, that’s a good thing.”
But as a marketer, you sort of step back and say, “You’re right. That doesn’t tell the whole story because that’s yesterday’s news. How’s the pipeline looking?”
But I have to say—we did research to support the book and I think the number was less than 40% of the 200+ CMOs that we interviewed over two-year period have any kind of brand tracking in place.
In the book, I talk about how to do it on the cheap because if you don’t have any kind of brand tracking in place, you don’t know what your awareness is. And if you don’t know what your awareness is, you don’t know how many, you just, you are in the dark on that whole aspect of brand and therefore you are only going to look at demand gen.
You’re creating the problem that you want to avoid which is: “Just measure me on the demand I create!”
Kady Srinivasan: That’s right, yeah. That always hits a ceiling. You are never going to be able to break through in different markets unless you do a lot of brand stuff. And you won’t know what brand tactics work unless you have the measurement.
Drew Neisser: Can you look at a quarter and you say, “Oh, our aided awareness went up, our brand preference went up or the connection between what they understand about went up…” Can you say, “Okay, that means six months from now or three months from now we’re going to see a bump”?
Kady Srinivasan: Yes, we are getting to that point. We have a really scientific model right now, which is built off of this idea of every activity needs to have an impact associated with that. And that impact kind of flows through months.
An activity like the pop-up that I mentioned, it is unlikely that there will be any immediate conversion of any sort—or maybe very tiny. But we do expect that based on certain, similar things, that over a six-month period, the revenue is going to flow through the funnel, right?
Whereas demand gen, or even the product announcement or product events, they probably have a more immediate kind of a bump.
We’ve got this beautiful model where we can take every single activity within marketing and map it to a certain impact KPI, time lag it, and then also associate a budget with it so that it gives you an ROI.
I can tell you, “Oh, well, we are still refining that model because we are trying a lot of different things we haven’t done before.” But for the things that we have tried, I can tell you, “Yes, I expect within the next X number of months, this much will show up in terms of pipeline or revenue.”
Drew Neisser: Right. Boy, as you were talking, one of the things that I think about a lot is the challenge of that kind of measurement, in that—the pop-up store is a great example because with a pop-up store there’s, I don’t know, how many customers were in that store?
Kady Srinivasan: About a hundred.
Drew Neisser: A hundred. Now, I guarantee you, if you want to get a testimonial video from those hundred, they’re going to wave their hands or if you need a reference or whatever it is, they become these super fans.
Kady Srinivasan: Yeah.
Drew Neisser: And the value of the super fans is going to ripple through.
Kady Srinivasan: Yeah.
Drew Neisser: But it’s going to be really hard to show any kind of immediate impact. The absence of that is huge when you don’t have a good testimonials or you don’t have those referrals and you don’t have what potentially becomes a micro community of super fans, right?
I wonder how, when you think about a thing like that, because the value of it is—it is a trickle down, but it’s a long one.
Kady Srinivasan: Yeah. I don’t know that I have an answer to how we create more word of mouth and how we measure that word of mouth. We’re trying, actually, we’re trying a few things. So maybe next quarter, I’ll come back and be able to tell you how we did it.
Drew Neisser: Right. I want to go back to, you talked about presenting a lot of metrics. I find that in general, and some of this is me borrowing from Forrester, is that eyes glaze over and a lot of marketers tend to present too many. I’m wondering if you had to narrow it down—and you by the way, used MQL, which we’ve almost banished from huddles.
Kady Srinivasan: Oh, really?
Drew Neisser: Yeah. We’ve almost banished it. There’s a defense for MQLs, but only in certain opportunities, and it tends to be in fast closing, shorter sales cycle things. There is that, but if you’re dealing in an enterprise, an MQL is useless.
Kady Srinivasan: Yeah.
Drew Neisser: Right? You have to have these what they call opportunities which are multiple people.
Kady Srinivasan: Yeah. Well, we have a self-serve motion.
Drew Neisser: Exactly. So, an MQL, we’ll cut you some slack. Now, you’ve got five minutes to present the results of the last quarter, what would you share?
Kady Srinivasan: Yeah, so we do have the—I call them the… You know The Lord of the Rings?
Drew Neisser: Sure.
Kady Srinivasan: It’s like the one ring that rules them all kind of thing. I have five rings that rule them all. The unaided recall number, which to me is the hardest thing to move, but if you move that can cause huge jumps. Website visits. MQLs. And then there are two steps below MQLs.
One on the self-serve side, which is signups and then the other one, which is SQL. We use another term, but it’s the equivalent of an SQL. And then finally, ASP. If we can optimize these and you control these as levers—ASP is not a leading indicator, but if the top four are leading indicators, then that becomes your business.
That’s how you can create the sense of health about your business. We track those pretty religiously. That’s what we present out on.
Drew Neisser: Remind me, ASP?
Kady Srinivasan: Average Selling Price.
Drew Neisser: Okay, right. Because we’re really looking at deal size and so forth, and if we can get higher deal size, we can close fewer deals. I wonder if there’s a blended version of this that actually becomes, it is ultimately your brand health metric, which is the combination of those things. I see those five rings, but I wonder if there’s an additive way and a weighted way of looking at that.
Kady Srinivasan: Yeah, you might completely be right.
Drew Neisser: Because certainly web traffic is real time. MQLs and Sales Qualified Leads would be in self—all of those things are happening almost on a daily basis and average selling price. So yeah, it would just be a question of which of those matter and weighting it a little bit, and now you have an index.
Kady Srinivasan: That’s right. Yeah, I 100% agree with you. I think the push and pull of which one drives what at what point of time is going to be very important too. When you’re starting off and you’re building a marketing team, you’re going to have to be ruthlessly focused on the more bottom of the funnel stuff and not care as much about the brand. But then as you evolve and continue, brand has to be a very big thing that you focus on. Otherwise, you’ll never be able to get to a certain growth goal.
Drew Neisser: Right. And I don’t think a lot of people understand exactly why I talk about in the book, but you know, here’s a very simple thing. It’s wonderful if you could just do pay per click, right, you know exactly what it is.
There is absolutely a clear correlation between brand awareness and your cost per click. There’s just no doubt and can be proven any day of the week. If you think you can live on just buying clicks, you’re going to limit the size of your business.
Would you say that you have a culture of experimentation in your team? And if so, talk about that.
Kady Srinivasan: Yes, a very strong culture of experimentation. In fact, in our self-serve business, every single thing is based on experiments. We go all the way from ideating and concepting, what those ideas are and then thinking about, “Alright, so we are going to really create a hypothesis for why we think that this experiment is going to work. We land that experiment. And we follow a very similar sprint cycle kind of thing, similar to engineering.”
So, if the experiment works in a smaller A/B test kind of an environment, then we release it into GA. When we do GA, though, you increase it by 10% website traffic. So, 50%, now 60, 70, 80, that kind of stuff. It is a very, very deliberate and structured process.
The nice thing I think that we’ve done is we’ve not only built a structure for each experiment and how it does, but now we’ve got a supply chain of them. We’ve got, you know, at any given point of time, we have 24 experiments running, which also makes it a good way for us to not only get quality, but quantity.
[43:06] Kady’s Tips for CMOing
Drew Neisser: Love it. Okay. We’re going to wrap up. I’m just curious, as you look back at since you first got to Klaviyo, what would you say are your two biggest lessons learned?
Kady Srinivasan: I actually, if you don’t mind, I want to go into what, personally, what did get out of it? You mentioned this thing about therapy, right? How the CMO Huddles is part therapy. Oh my god, I cannot believe how true that is.
I think the biggest takeaway for me is, I don’t think a CMO job is easy. It is, like, impossible. It’s an impossible job. You have so many different stakeholders, asking for so many different things and wanting everything right now and for the long term and for everything in the middle.
And it sometimes can feel like, “Oh my god, I’m failing every single one of my stakeholders. I’m not able to do this and this and this.”
I think at that point, you need a community or someone who can say, “No, no, no, everybody is going through this. It’s fine. Like, you’re human. It’s okay. Let’s do what we can in our control.”
That I think was my biggest takeaway. Surround yourself with a tribe of people who are going through the pain, and then don’t be a perfectionist. That was a learning for myself. I was like, I want to come in and do all of this stuff and everything is really perfect. Life doesn’t work that way. And it’s okay.
Drew Neisser: I love both of those. Obviously, the first one, it was so funny in a huddle that we had I think in December one of the CMOs turned to the rest of us and says, “You know you can’t outwork this job, right?”
Kady Srinivasan: Yeah. So true.
Drew Neisser: I loved it. It was like there was all these, “Ah, wow, you’re right.” Okay. Yeah, it’s amazing. All right. Well, Kady, thank you so much for being on the show.
Kady Srinivasan: Oh, this was so much fun. Thank you for having me.
Drew Neisser: My pleasure. Okay. If you enjoyed the show, don’t forget to write a review on your favorite podcast channel. We’re available everywhere. Go to Apple. Give us a six-star—okay, five-star review. Share it with a friend. Our numbers are going up, which means you’re enjoying these shows and I really appreciate that.
Renegade Marketers Unite is written and directed by Drew Neisser—Hey, that’s me! Audio production is by Sam Beck. Show notes are written by Melissa Caffrey. The music is by the amazing Burns Twins and intro voiceover is Linda Cornelius. To find the transcripts of all episodes, suggest future guests, or learn more about my new book this heaviest B2B market or Renegade, visit renegade.com. I’m your host Drew Neisser, and until next time, keep those Renegade Thinking Caps on and strong.