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How CloudSponge upgraded 20% of grandfathered accounts in a day

With Jay Gibb, CEO
2009
Founded
16,000
Users worldwide
150,000
Website installs
Company
CloudSponge provides a SaaS contact importer for email referral forms.
https://www.cloudsponge.com
Headquarters
California
Industry
SaaS
Type
B2B

Six years after CloudSponge launched their contact importer for referral forms, they released a major update to the product that added greater functionality and improved the design. To ensure a successful release, CloudSponge used Intercom to personalize their announcement message and drive adoption.

A more personal product launch

CloudSponge’s widget reduces form friction by embedding a user’s contacts from popular webmail accounts into a website form. It lets you easily select a contact rather than type out an email address when you want to send an invitation, greeting card or coupon. It’s a simple, effective tool used by more than 150,000 websites – including Airbnb, Yelp, and Lyft.

The product update was the biggest in the company's history and affected their audience in different ways. Notably, the new widget would only be available to customers on current pricing plans, but not to those on grandfathered plans. With over 90% of customers on grandfathered pricing plans, a key goal of the announcement was to encourage these customers to upgrade and move to current pricing.

In previous updates, the team would typically create a single email, but this announcement needed to be sent to anyone that had created a CloudSponge account, from long-time customers, to those who didn’t subscribe after a free trial. A single, generic email simply wouldn’t work. “There’s no good way to write something that’s applicable to everyone. When we tried, it was boring, and we were sure it wouldn’t get the best response possible,” explains Jay Gibb, CEO of CloudSponge.

That’s when Jay had an idea. “We already pipe in all of our custom attributes through Intercom, let’s figure out how we can segment the different groups we need to send tailored messages to.”

The power of segmenting your audience

The team settled on which segments to target, the unique action they wanted them to take, and how to best position the message. In the end, they identified four segments that would need unique emails: customers with grandfathered pricing, customers with current pricing, customers who churned, and leads who completed a free trial. Using custom attributes inside Intercom, in a few clicks they were able to organize their contacts into the segments they wanted to reach and send them personalized emails.

SEGMENT 1: Customers with grandfathered pricing

The first segment consisted of customers with grandfathered accounts. In terms of revenue potential, this was the most valuable group. Current pricing plans range from two to four times the cost of grandfathered plans. The challenge was to show these customers how the update provided greater value, and that it would be worth the additional cost.

Email to customers with grandfathered pricing

SEGMENT 2: Leads who completed a free trial

The second segment included those that completed a trial, but failed to convert to paid accounts. Feedback from this group indicated that some didn’t purchase because of blockers that were addressed with the product update. The goal for this group was to make them aware of the new features, and invite them to reconsider purchasing.

Email to leads who completed a free trial

SEGMENT 3: Customers with current pricing

The third segment was customers on current pricing plans. From a revenue perspective, this segment would have little impact because they automatically get access to the updated widget. However, these customers are still critical to the business. The announcement needed to encourage them to update to the new widget so they continue to get the most value from the product possible.

Email to customers with current pricing

SEGMENT 4: Customers who churned

The final segment was churned customers. The goal for this message was to convince them to take a second look at the updated product.

Email to customers who churned

Results

The first sign of success for the targeted campaign were the email open rates: 32% for customers on grandfathered pricing, and 42% for leads who completed a free trial. According to Jay, they were substantially higher than average. An added benefit of using Intercom was the ability to track leads who didn’t open the email. That insight allowed them to follow up with those who weren’t aware of the product update, instead of spamming entire segments repeatedly.

The most important success metric was the number of grandfathered accounts moved to current pricing. The team’s expectations were set on a slow rollout over many months, so when they saw an immediate surge of upgrades the day the email campaign went out, especially among grandfathered accounts, they knew the personal, targeted message was clear and effective.

“We expected that moving all of our grandfathered customers to new plans would take a year, but with Intercom’s help, we had 20% of them upgrade on the first day – that we didn’t expect."

The 20% of grandfathered customers who upgraded now pay between 2 to 4 times more per month, and represent nearly 18% of CloudSponge’s entire customer base. By creating and delivering segmented emails through Intercom, CloudSponge was able to make an immediate and powerful impact to their bottom line. In the coming months, the team at CloudSponge will continue to reach out to customers with Intercom, both in-app and via email, to encourage them to upgrade. The goal is 100% adoption in under a year.

Explore products used: Engage, Respond

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