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Top takeaways from The Second Lever: How resilient companies build profitable growth engines

Stewart Hillhouse
Posted by Stewart Hillhouse|Published on July 13, 2022
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The Second Lever brought together CMOs, VCs, and growth leaders to share how they're shifting their marketing efforts given the new profitable growth landscape.

The "growth at all costs" era of company building is over. This special event revealed the secret sauce behind the fastest growing companies — conversion.This post shares top takeaways from the sessions. Full replays of the sessions are available to watch here

Growth at all costs is no longer being rewarded

Bogomil Balkansky, partner at Sequoia Capital, breaks down how the macro-economic trends (high interest rates, inflation) have impacted the growth landscape for startups. 

"A few months ago companies could raise capital at a valuation 100x their revenue. That value is now usually below 20x. Growth at all cost is no longer being rewarded."

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How does this insight affect marketers at startups? It means that the old growth playbook is no longer effective. 

The new growth playbook requires you to continue to grow, but in an efficient way, as shared in the next highlight. 

Sequoia's advice to portfolio companies: you're still expected to grow, but profitably

If your company raises money, then there's still an expectation to grow, regardless of the economic conditions. But with growth capital more expensive and harder to raise, becoming profitable is now more important than simply growing revenue. 

And how do you become profitable while still growing? By spending your cash efficiently. Efficiency was a key topic that came up in a number of sessions, including the CMO Panel where Salesforce, Attentive, and Box all cited efficiency as an area of high priority. 

So what does marketing efficiency mean? It means being able to turn marketing spend into revenue in a predictable and controllable way. 

As you'll see in the next highlight, the old growth playbook says that you should keep investing in ads to drive more traffic to your website. But in reality, this tactic only works to a certain level, at which point you're no longer growing but just setting your marketing spend on fire. 

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CAC has nearly doubled in the last 6 years $19 of $20 spent on ads is wasted

When Jaleh Rezaei was heading marketing at Gusto fresh off a new fundraising round, they were spending money to appear on every marketing channel possible. 

But what they found was that no matter how much they spent trying to optimize their ads, the resulting revenue never kept pace.

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We were getting in front of the right audiences, but they weren't converting into customers." she said. "The only lever we knew to grow was to drive more demand to our website, but it wasn't working. That's when we realized we needed to do something different, or risk running out of money."


She had the realization that there was a second growth lever – conversion. She built a dedicated engineering team to focus on improving the conversion rate across their website to turn more visitors into customers. 

This conversion focused marketing team helped turn Gusto around and 100x their revenue shortly after. But they're not the only ones who have had this kind of step-function success. The next takeaway shows how Notion accomplished the same outcome, but without needing a dedicated growth engineering team. 

How Notion was able to increase revenue from ads by 60%

Notion's note-taking platform has dozens of use cases across many personas. At any given time they could have hundreds of ads running at the same time all with different messaging, calls to action, and images. 

They needed to find a way to increase the amount of revenue these ads were generating without increasing their ad budget. Notion turned to Mutiny to personalize their landing pages with the same messaging and images as the ad the visitor had seen previously. 

The result? A 60% decrease in the cost of acquiring a customer. That means that Notion can now generate 60% more revenue by spending the same amount on ads because their landing pages convert better. That's the power of conversion.  

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How big of a priority is conversion? As you'll see in the next takeaway, all three CMOs agreed that becoming more efficient with their marketing spend was top of mind at the executive level.

Why did Jason Lemkin describe the CMO panel as "perfect for this unique moment in time"?

The CMO Panel session featured rare appearances by three highly respected CMOs with track records to backup their insights. 

Sarah Franklin – CMO at Salesforce

Chris Koehler – CMO at Box

Sara Varni – CMO at Attentive, previously CMO at Twilio

Moderator and Founder of SaaStr, Jason Lemkin, came right out of the gate to say: "This is the most interesting panel I've seen in my 10 years doing these, not only because of the caliber of speakers, but because they're perfect group to speak about this unique moment in time."

And he was right. All three panelists shared how they're adjusting their marketing teams, with marketing spend efficiency standing out as a focus of all three companies. 

Watch the replay here.

How Salesforce has adapted their marketing

Despite being over 20 years old, Salesforce's revenue growth is still accelerating. In fact, they were able to double their revenue since 2020. 

Salesforce revenue story

So how are they course-correcting their marketing amongst the mixed signals from the market? 

"Efficiency is our big focus – finding ways of being able to do more with less." said Sarah Franklin, CMO of Salesforce during the CMO panel at The Second Lever. 

She went on to explain that Salesforce is focusing on helping their customers prepare for a cookie-less world, doubling down on in-person events, and keeping a close eye on the demand for all their product lines to understand what the market needs.

How Ramp increased sitewide conversions by 96%

Yash Godiwala runs Ramp’s Growth Innovation team — the “scouts” of their growth team — who test and launch net-new growth initiatives. Ramp’s go-to-market challenge is how to build relevance across dozens of solutions serving dozens of personas at all different company sizes, all at once.

Watch the full conversion secret here.

Optimizing ads only gets them so far. Yash’s team looked to how they could optimize traffic generated from their paid teams by dynamically adjusting landing page headlines to match the ad copy a prospect would see before. Scaling this requires a well-architected set of UTMs mapped in Mutiny, seeing an average 23% lift across all UTM-personalizatino in their v1 experiments.

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Second, Yash shared how they matched industry personalization, including matching distinct tone of voice. For instance in healthcare, matching their language (e.g. they call themselves ‘practices’, not ‘businesses’ or ‘company’) they saw an 86% lift. Their industry personalization’s averaged 27% lift overall.

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Third, Yash shared how he was pulling winning experiments that were meant for specific segments to test across their whole website — the thinking being that the improvement might not be all about tight audience relevance, but a general copy improvement — and this stream of insights helped drive huge, sitewide 96% lift in improvements.

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Finally, Ramp’s growth team measures each experiment based on impact/effort over total pipeline. Conversion experiments (like with Mutiny) were 10% more efficient than paid experiments overall.

Hillary’s ABM framework at Snowflake

Hillary Carpio is Director of ABM at Snowflake. She shared her framework for breaking down different types of content for Snowflake’s brand, specific industries, accounts, and people, then how to map that across inbound, outbound, sales, and prospecting experiences.

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She shared three examples matching to each type of content. Watch the full conversion secret here.

First, industry-based callouts to ensure everyone in a particular vertical was being directed to the most relevant content for them — with a 24% lift.

Second, account-based pages that go beyond “slapping the account name” on there, but designing pages that are deeply relevant even if you remove the company name.

Third, people-based pages (for outreach only, not ‘creepy inbound’) that are 10-times more likely to generate engagement than account-level pages alone.

Finally, Hillary showed how all these industry, account, and person-level personalizations were combined into a pre and post-event page for Snowflake’s Summit. These 1600 variations generated 50,000+ pageviews and helped it become Snowflake’s largest event ever

Get more highlights and watch the full presentations

Watch the full presentations from The Second Lever, and check out the key takeaways from those who attended live. 

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