cloudHQ has mad growth.
Founded in 2011, within a year they’d racked up over 65,000 users.
Today, they’re closing in on one million.
At present, they add around 8,400 new users per week.
What accounts for these impressive numbers? Among growth hacking examples, what makes it stand out?
According to co-founder Naomi Assaraf, it’s all about their product strategy.
cloudHQ builds and releases 2 to 4 new products a month — nearly all using a freemium model.
Gmail Email Templates: one of cloudHQ’s free products.
Based in San Francisco, cloudHQ is both bootstrapped and profitable.
Their commitment to free products — instead of relying on marketing hype — has been the secret to such growth.
Now, before you check out and think, “I don’t have a development staff to build products…”
As you’ll see, there are specific tactics here for any company looking to accelerate growth — including several you might find more than a bit counterintuitive (e.g. “Don’t get stuck in a niche”).
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1. Find a Big Community You Can Serve (And Don’t Get Stuck in a Niche)
cloudHQ used to focus on B2B services, but it found that doing so was limiting its growth.
Today, they focus on products that appeal to a much wider audience.
Specifically, they build free tools that help anyone with Gmail or a business email hosted by G Suite.
That’s well over 1 billion potential users, according to numbers from Google.
Which means, even as they approach one million users, cloudHQ has still only reached 1% of its potential customer base.
“You have to offer something extremely exciting for B2B to really explode,” Naomi told us. “When we were focused on the B2B market, that was good for revenue — but not for the kind of growth we wanted to see.”
“We were a little stuck in the B2B niche,” she added. “It was keeping us from growing like we wanted to.”
Why cloudHQ Chose Gmail as a Focus
In the early days of cloudHQ, the company’s focus was providing sync and backup services to medium to large businesses already using enterprise cloud solutions. To find these clients, Naomi often employed classic B2B sales strategies, such as cold-messaging people through LinkedIn, and B2B speaking engagements.
The approach was effective — they were gaining new clients and increasing revenue — but they weren’t seeing the growth they were hoping for.
“We always had an inkling that we should look into B2C, but we couldn’t find a way into that market without taking a revenue hit,” Naomi said.
Then they discovered something. At least 80% of all their customers were using their service to backup their Gmail accounts.
So, they began looking into Chrome extensions that could enhance Gmail’s native feature set.
“We thought, ‘Oh my god, this is huge! What a huge ecosystem!’ And now, our Chrome extensions are driving almost all of our growth,” Naomi explained.
Well, because almost everybody has a Gmail account.
cloudHQ now maintains over 35 freemium Gmail add-ons, and they add about 2 new tools each month.
Takeaway for marketers: What existing ecosystem or community could you find that is full of your ideal prospects? For cloudHQ, it’s “anyone using Gmail.” What about you?
2. Deliver Value in Small Pieces
Want to add value to a community? Don’t make them pay a hefty price for an over-complicated product when they might only be interested in one or two features.
“Other companies offer maybe 20 features in one product,” Naomi told us. “And then people are stuck with those 20 features that they may not understand or use, but they’re still stuck with them. Part of our secret sauce is to make each feature its own product. People like that because it gives them complete control over what they want to use.”
In fact, as Naomi told us, the very first Chrome extension they released — a backup service — was far too complicated, had way too many features, and took way too many steps to use.
“Amazon really had something brilliant when they added their famous ‘1-Click Order’,” Naomi said. “It’s just simple. One click and you’re done. That’s what we try to do now with our products. You install it, and it goes right into Gmail and requires zero education to have to use it. You see a new button, you click on it, and you get what you want.”
One of their top-performing products is their “Save Emails to PDF” extension which follows this “one-click” method.
Takeaway for marketers: What could you offer your audience to solve a problem with just a click? Could you build a Chrome extension like cloudHQ? Or a microsite that offers free stock photos? Or an educational resource that your audience would love?
3. Make Upgrading or Purchasing a “No-Brainer”
The biggest criticism of the freemium model is that you’re investing a lot of time and effort into tools that you might not see a return on.
It’s the same for anyone building an audience through content marketing or other techniques where you deliver value for free.
There’s some truth to that critique, but not if your upgrade options are “no-brainers” for power users of your free products.
For most of cloudHQ’s products, the free version is robust enough for the average user.
For “Save Emails to PDF,” for example, the free version includes 100 emails saved to PDF per month from your Gmail.
If all you’re doing is saving an occasional receipt to your hard drive, 100 a month is plenty.
But, if you’re an accounting manager or in human resources, you might need to archive dozens of emails every day. For you, an unlimited “premium” version of the product is available for just a few dollars a month.
The magic of this approach?
Because cloudHQ offers over 35 free products, almost all of them with a premium version available, each individual user becomes much more likely to find a product they want to use heavily.
Which is why 14 percent of cloudHQ’s users eventually sign up for at least one paid “premium” product.
“We don’t worry too much about trying to convert people to the premium products,” Naomi said. “We just focus on giving more and more value. What we’ve seen is that if we do that, people eventually find something we offer that they really like a lot. When they do, they’re happy to pay for the premium version.”
With every freemium account, there are upgrades once you hit a high threshold; so not only can cloudHQ drive growth with freemium extensions, they can actually get revenue from them too.
Takeaway for marketers: Are your paid products or services a “no-brainer” for power users of your free products or other free resources? If not, what paid upgrade could you offer that would be a natural extension of your freebies?
4. Find Ideas by Looking for Users Who Are Dissatisfied with Other Products
Where does cloudHQ get ideas for all these freemium products it releases?
(1) By looking for products that have high users with low reviews.
The first place cloudHQ looks for ideas is at products that have a lot of users and a lot of really bad reviews.
“We snoop on other Chrome extensions,” Naomi explained. “Anytime I find anything that’s Gmail related that has the combination of high users and low reviews, we’re going to build something similar, but we’re going to make it amazing so that people will love it.”
(2) By selling apps they built to solve an internal need.
cloudHQ also builds many apps to solve internal needs, which often turns into products that they can offer to their own customers.
“If we’re using a product and it’s not meeting our standards, we’re going to build our own version of that — because we need it anyway,” Naomi told us. “And if when we feel it’s good, we’ll offer it to our user base as a free product.”
This tried and true method works so well because, if you’re dissatisfied with what’s on the market, chances are that many others are dissatisfied as well.
(3) By Listening to Customers
Naomi is very proactive about encouraging soliciting from customers and often asks them to email her.
“Listen to your customers even if you don’t understand them,” she said. “Engage with them anyway. Eventually, you’ll get what it is that they’re looking for.”
“Customers are responding to you sometimes because they just want you to succeed. They want what they want. It’s great because you want to build a product for people like that.”
Takeaway for marketers: Are there companies offering products or resources that have really low reviews? If so, make something better! Or, do you have tools or resources you’ve built internally that you could release as free or paid products?
5. Add Traditional Marketing Tactics to Support Your Efforts
How does cloudHQ reach people? Specifically, how have they reached almost one million people without an insane marketing budget?
By email, mostly. And then a sprinkling of what we could call “traditional” marketing channels like social media and paid ads.
Whenever someone downloads a free Chrome extension that connects to a Gmail account, it adds that person’s information (and email address!) to cloudHQ’s database.
“I know it’s a little old school to say email, but imagine if you always get something new from a company —something new that’s free and that helps you immensely,” Naomi said. “This is why we have open rates of 67 percent. Some of them are right around 80. But the highest was 84 percent.”
This is how cloudHQ cross-sells to its existing user base — by constantly offering people new free tools they can add to their Gmail accounts.
That’s perfect for anyone already on their email list, but what about people who’ve never heard of cloudHQ?
Other Marketing Tactics Play Supporting Roles
If this were a movie, the product would be the lead, email is the co-star, and every other marketing strategy is there to play a supporting role.
All cloudHQ’s marketing is focused around its products.
For instance, look at their blog headlines. Each article is talking about one of the company’s free products.
This gives Google a chance to funnel organic traffic to people searching for better ways to use Gmail.
cloudHQ has an active Twitter account with over 13,000 followers. They post a variety of content, but the focus is still on their free products.
“Our content is going to be whatever new product we’re going to offer,” Naomi said.
For instance, they might Tweet about a new product three times on launch day, then twice in the next couple of days, and then down to one Tweet by day five. And with new products coming out at least twice per month, that’s enough to fill their accounts.
“And then, when we need more suggestions for content, we use either HubSpot or Quuu. It helps with generating content so you don’t have to spend a lot of time searching the internet for good stories that are relevant.”
Product Hunt is a great promotions platform for companies that want to heavily invest in their products, but it’s not an easy one.
Naomi chooses to release on Product Hunt only for products she believes will do well there. And, she warns, promoting products on Product Hunt is a 2 week long preparation, and is a two-day-straight commitment on launch day.
“First, you do a bunch of pre-release promotions, emailing all your contacts and telling them about the new product and asking them to be ready to check it out on Product Hunt,” she told us. “Then on release day, you have to be vigilant to gain traction so that it gets featured the next day. If and when it does, that’s another 24 hours of promotions to encourage and follow up on.”
It is well worth it for products that do well, but keep the coffee handy.
Speaking and PR
Naomi gives a lot of talks.
She’s built up a reputation as an expert in marketing and her other interests, such as virtual reality.
Her busy speech schedule is instant marketing for cloudHQ.
When she talks about her company, she doesn’t start talking about the 35 products. Instead, she focuses on the value cloudHQ brings to the community.
“They’ll never get it if I start talking about individual features. I’ll confuse them,” she told us. “But if I just say ‘We make Gmail more useful,’ they’ll think, ‘Why not? Let me go take a look — it’s free.’”
Takeaway for marketers: Word of mouth, upselling, and cross-selling are great connection builders and can drive tremendous growth. But “traditional” marketing will always have a role. It’s the primary method you have for reaching people who’ve never heard of your brand.
The Net Effect of This Approach
For cloudHQ, the net effect of this steady cadence of free products is name recognition that has come from Gmail users adopting their products.
“We’ve become a recognized brand now,” Naomi told us. “Whenever we release something new, people are excited to open the email about it — because it’s coming from us, and it’s free.”
Maybe you don’t need to invest in a zany, cool, hip (add your adjective here) brand persona if your products and services speak for themselves.
Instead, maybe you can just:
- Find a community of people
- Deliver a ton of free value to them
- Make it a “no-brainer” for people to upgrade or buy from you
For cloudHQ, the formula has grown their business to the brink of one million users.
With no slowdown in sight.
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