Chargebee: 20x Growth in 2 Years Without a Robust Marketing Plan!
Chargebee is one of the largest subscription management platforms in the world, driving revenue operations and billing for SaaS and subscription-based businesses.
At the start of the Covid-19 crisis, Chargebee’s traffic dropped by 14% in two weeks — something that most companies across the world also experienced:
However, Chargebee was able to recover quickly in the next two weeks:
In fact, not only did the traffic recover quickly, Chargebee was able to grow its metrics and, in the subsequent two weeks, ended by 20% higher than the pre-Covid levels:
How did Chargebee do this?
To understand the marketing gears behind their metrics, we spoke with Vikram Bhaskaran, who is the Senior Director of Marketing at Chargebee. He has been with Chargebee since 2018, during which time the company has grown rapidly. Chargebee’s leading marketing metrics in this time have grown a whopping 20X.
Vikram is one of the most experienced SaaS marketers in India, with more than 15 years of SaaS marketing experience. He has handled marketing at some of the most successful SaaS startups in India. He was with Zoho in 2006 (when Zoho was known as AdventNet) and with Freshworks in 2012, when Freshworks — then known as Freshdesk — had just raised its first round of funding. He has been involved in the SaaS space during these formative years and has contributed to the evolution of SaaS marketing in India.
Conventional thinking naturally drives marketing organizations to design progressively more robust strategies as they grow. Vikram adopted a contrarian view and formulated an “Adaptive Marketing Strategy” that is able to evolve rapidly with company needs and market dynamics.
As he describes it, a Robust Strategy is one that is able to sufficiently weather external changes. An Adaptive Strategy, on the other hand, is designed to capitalize on these changes and turn them into opportunities for growth.
Vikram shared that there are 4 elements of the Adaptive Marketing strategy:
- Market environment
Any customer acquisition strategy, let alone adaptive marketing strategy, depends on the buyer. Therefore it is critically important to understand buyer’s needs and goals, and map out their aspirations.
Second, channels correspond to distribution. All post-PMF startups must identify at least one channel that can scale. As the channels hit their capacity, marketing teams need to evolve and discover newer channels.
Third, interestingly, adaptive marketing is built to work with the diversity that is inherent in marketing teams. Marketing teams have artists, data analysts, creators, executors, iterators and optimizers. This is a heterogeneous set of people and adaptive marketing leverages this diversity.
Finally, adaptive marketing needs to be fluid (“flow like water”) in order to be able to quickly respond to market dynamic changes — either induced by customers, competitors or external factors.
 Buyer: Understanding Needs and Aspirations
The Buyer Persona is the most important aspect of the Adaptive Marketing strategy. Constantly evolving insights about customer requirements enables the companies to react quickly to adjust channels, reorient teams and respond to changing market dynamics.
But how can a company define buyers precisely? In particular, Chargebee has more than 15,000 customers across various industries in 53 countries. These include businesses ranging from early-stage startups just launching their products, all the way to established companies with sophisticated finance and revenue functions.
Within a customer, Chargebee has a multitude of stakeholders: finance teams involved in receivables, reconciliation and reporting; billing teams that need to automate their invoicing operations; product teams that need to drive pricing decisions; sales teams that need to close increasingly sophisticated negotiations; developers that need to implement the platform; Business heads; and CEOs.
With so much diversity across customer segments, roles, and geographies, how does Chargebee define its target customer or the buyer persona?
For Chargebee, this came from deep customer research that involved talking to users and existing customers, studying the first interaction of prospects in sales calls, and analyzing market behavior from search trends. This blog describes Chargebee’s approach to Continuous Customer Development & the steps involved in detail.
Vikram gave a brief overview of how Chargebee is building a brand around “RevOps” (Revenue Operations). The RevOps idea evolved while Chargebee was developing the buyer persona. Chargebee started this exercise by listening to the sales call — especially the first call between the prospects and the sales team. Vikram said that it was insightful to listen to how potential customers described their problems and their pain points. This initial understanding was refined by subsequent 1:1 conversations with customers and prospects to understand what their day looked like and what were their typical workflows. This helped develop a deeper understanding about customers:
- JTBD: What were the “jobs” they were employing Chargebee to do? Chargebee found this to be “billing and subscription management”.
- Zero Moment of Truth (ZMOT): this refers to the discovery and awareness stage in the buying cycle: what did the customer do just before they became aware of the problem? What was the itch they wanted to scratch? For Chargebee this was an “operational inefficiency” that the customer felt.
- Non-functional Why’s: Why did the customer want to do this job? What was their underlying goal? Chargebee found this to be “revenue growth”.
- Underlying Aspirations: What were the aspirations of the people involved in this process? Chargebee found this to be the “desire to be seen as a champion; someone who knows how to navigate a rocket towards higher growth”.
The end result was the realization that irrespective of their actual roles, prospects came to Chargebee with the specific pain of solving inefficiencies in their revenue operations just as they saw a hockey-stick growth potential in their horizon.
Defining personas not only helped the marketing team fine-tune positioning and messaging, but also made it possible for the whole organization to build, sell, support and engage the right customers.
But more important — clarity about the target persona also had a wonderful side effect: happiness! The org-wide focus and clarity made it even more satisfying to plan and visualize the value they were adding.
 Channels: Defining Scalable Pathways
Three pillars of any marketing team are: research, creation, and distribution. And within this, distribution comes down to the mix of channels, and how well the team is able to leverage them.
Within the first 6 months of deploying the Adaptive Marketing Strategy, Chargebee saw a 3X growth in demand. And, as mentioned earlier, over the next 2 years, these leading metrics have grown over 20X.
Vikram broke Chargebee’s approach to channels into 2 frameworks: Discovering Channel Fitment and Assessing Channel Capacity.
Channel Fitment corresponds to evaluating whether a channel is the right one for acquiring the target personas. Channel Capacity lets the team evaluate the continued potential left to tap within the channel.
As an essential platform required by every high-growth SaaS business, Chargebee has the advantage of playing in a market with huge inbound demand. As a result, channels like Organic content and Paid search, in addition to inbound category creation through branding and thought leadership have been the most scalable channels.
As the business grew, Chargebee scaled into additional channels to augment specific customer segments (like Account Based Marketing for Enterprises), while beefing up its community focus for early stage businesses with high growth potential.
What is the best way for a startup to explore a new channel? Vikram said that Chargebee uses what he calls the 3S Framework for this: Scout, Scope, and Snipe.
In this Scout Phase, Chargebee runs broad low-investment campaigns to test a new channel. These could be paid ads, content-based activity, etc. The idea is to identify a few successes that can be explored further, without expending significant budgets.
As specific channels & campaigns demonstrate potential, the Scope Phasefocuses on improving the quality of the results. In paid search, for example, this is done by launching specialized campaigns with narrower focus on just keywords or activities yield better results.
Finally, the Snipe Phase serves to turn the activity into a repeatable process. In the context of paid search, this involves setting negatives and having exact matches that can be scaled for predictable results.
These three phases help continuously drive new campaigns & channel possibilities, while still ensuring quality & ROI.
In the context of Channel Capacity, Vikram referred to the “Law of Shitty Clickthroughs” proposed by Andrew Chen [link], which refers to the diminishing returns provided by a channel as volume scales up.
Even as the quality goes up, how does one make sure that the quality doesn’t get compromised? How can businesses pick channels with sufficient capacity so that they can defer the curse of shitty clickthroughs?
Chargebee uses the following Channel ROI Framework for this purpose:
Clearly, the goal is to find channels that are “Leaders” (i.e. provide high quality leads / customers at low cost) and to stay away from high cost but low quality quadrant. Vikram mentioned that Bleeders (such as low-cost paid ads) are interesting because they can provide volume at low cost. However, marketing teams need to closely monitor their Bleeders, and measure their downstream ROI in dollar terms. Finally, Truffles are likely the largest segment — composed of high quality campaigns that also require more effort and budget. Typically, Truffle campaigns have to constantly out-bid competitors, but they are good indicators of market size and our position in it.
For Chargebee, Account-based Marketing (ABM) has grown from a Bleeder into a Truffle channel, while Community-based initiatives shift between Bleeders and Leaders.
Focus on Channel Fitment and Channel Capacity allows marketing teams to quickly double down or back away from initiatives.
 Team: Driving Individual Ownership
In a fast-growth business, the focus of the marketing team continuously shifts from Volume, to Velocity, Predictability, and Variability.
Vikram pointed out the moving targets that a marketing team needs to solve for, as it evolves from “Robust” to “Adaptive”:
- Marketing teams need to satisfy demand growth. Marketing teams need to invest in channels to feed the pipeline required to drive sales.
- Marketing has to enable sales to consume pipeline effectively — through intelligence, automation, messaging and enablement.
- As one of the biggest “expense” centers in a fast-growth organization, marketing teams have the responsibility to provide the organization with predictable and sustainable growth.
- Marketing is responsible for increasing the size and quality of the pie — by brand building to drive awareness, market creation to increase the size of pie, and differentiation to craft perceptions.
- The marketing team is responsible for driving adoption, engagement and advocacy within existing customers, to create a virtuous cycle of referrals.
Note that the first three stages correspond to linear growth (with respect to the marketing spends). Building brand and developing an emotional connection with customers provides some amount of non-linearity, while investing in customer engagement unlocks network effects. (We have earlier talked about how companies that don’t have inherent “networking” play can also unlock network effects [link].)
Each of these activities, clearly, are quite different from each other. In order to succeed, marketing leaders should structure their teams around specific focus areas, with metrics and inter-locking contracts. Vikram (elsewhere) illustrates this with the following representative example:
Given the evolving or moving target for the overall marketing team and differing success metrics for various marketing sub-teams, what holds the marketing team together? It is the clarity about the buyer persona (what are customers’ needs and goals) and the organization’s needs and goals.
Business needs are often captured by the “north star metric”. For Chargebee, the core indicator of success is “Net Retention Rate”. This goal is shared by the whole company and helps Chargebee track the speed at which the customers are growing. It helps the marketing team to also evaluate the leads, MQLs, SQLs, etc. in a more consistent manner.
In order to be truly Adaptive, marketing teams need to decentralize strategy. Vikram explained how every marketer in Chargebee is empowered to drive strategy with minimal oversight. He explained 2 systems that the team uses to ensure they stay aligned without stepping on each other:
- The PEAR Commander’s Intent: Every marketing activity and function has to satisfy Predictability (fitness to purpose), Excellence (exceeding expectations), Accountability (one problem — one owner) & Reporting (operational rigor).
- Socratic Method: Individual marketers are empowered to make decisions by documenting answers to 4 questions: What is X worrying about? What would X do? Why is this the right thing to do? How would X want to track progress? X here could be their manager, head, the CEO or customer.
 Market environment: Staying tuned to Changes
The final and most critical aspect of the Adaptive Marketing strategy is the ability to not resist the constantly evolving market dynamics but to rather turn it into an advantage.
Vikram builds on Bruce Lee’s quote (Be like water) to describe how an Adaptive Strategy must flow freely without resisting change in order to stay flexible and evolve rapidly.
For this, Chargebee built a system of Indicators, Triggers, and Strategies. Chargebee takes the org-wide look at the Indicators on a weekly basis (while the marketing team tracks the Indicators on a daily basis). As indicators hit different thresholds, they trigger a specific strategy set that the team operates on.
The dashboard with Indicators, Triggers, and Strategies is shown below:
Chargebee has four top-level indicators:
- Top-of-the-funnel (ToFu) opportunities: what is happening at the ToFu level? For example, early in the lockdown cycle, Chargebee detected that the interest for webinars and learning courses had gone up. As a result, Chargebee organized almost 10 webinars within the first two weeks of the lockdown.
- Demand / search intent: for Chargebee, inbound traffic continues to be an important channel. To track it, Vikram uses the Key-5 Search Index — an index of their top 5 search pillars.
- Pregnant python: this indicator helps Chargebee to identify if there are bottlenecks in any part of the pipeline. Chargebee then either works to resolve the bottleneck or, if needed, to rethink strategy.
- Leaky bucket: Chargebee uses this as the frth indicator to track customer and revenue churn. Chargebee qualifies the churn as voluntary / involuntary and tracks churn across verticals / industries.
These Indicators have different impact on the company’s north-star metric: NRR (Net Revenue Retention). Aligned with NRR, Chargebee has a number of Triggers. For example: Estimated Bookings, Cost of Estimated Bookings, Estimated Payback Period, etc.
As these triggers flip, Chargebee’s marketing team already has the strategic priorities and initiatives in place to quickly shift directions.
Chargebee’s marketing team further structures all their initiatives into 7 categories ranging from Critical Necessities to Discretionary by just answering 3 questions:
Depending on the Yes or No answer for each question, there are eight different scenarios. Each scenario provides guidance for the strategy:
Along with the operational rigor, Indicators, Triggers, and Strategies provide the mechanism for Chargebee to respond quickly to the evolving market dynamics.
Vikram emphasized that scaling marketing teams should not waste their time building robust marketing strategies. Robust market strategies attempt to withstand external disturbances and resist changes, which makes them quickly lose touch with reality.
First, in a fast-growth business internal teams, processes and priorities change so rapidly that forcing robustness could isolate the marketing function from the rest of the organization.
Second, while the Covid situation is unprecedented, markets and environments change directions even otherwise in unpredictable ways. While robust strategies might provide immediate insulation from these turbulences, the incremental shifts in the environment render the strategy obsolete quickly.
Eventually these deep, well thought strategies end up living only on the paper (or spreadsheets) while the actual marketing plan gets changed ad-hoc. Teams lose sight of the bigger picture, stresses run high, and marketing leaders find themselves struggling to plug the leaks in their strategy.
Instead, Vikram suggested organizations to focus on fluidity instead — by designing their marketing strategies to be Adaptive.
However, an Adaptive approach is as much an organizational mindset as a strategy — in order to be truly adaptive, marketing teams should account for
- Constant research & understanding of the Buyer Context
- Continuous discovery & expansion of Channels
- Flexibility & individual ownership within the Team
- Systematic tracking & reprioritization based on the Environment.
Based on these, an Adaptive Marketing Strategy provides a natural way to keep the marketing plan flexible to identify new realities and capture opportunities. Adaptive Marketing, therefore, is the ideal way to build the marketing function at every company: from an early-stage startup to growth-stage startup and even large enterprises!