Unbounce had recently closed its Montreal office, and a buyer's diligence had come back with a plain objection: the company was not profitable. That was deliberate. We had taken on debt to grow faster, and on the measure investors use, growth plus margin, we looked weak.
There are two ways out of that. The common one is to cut: fewer people, less spend, and profit and revenue per employee jump inside a couple of quarters. It works on paper for about as long as it takes to sell. The other is to grow into the number. It is slower and harder to explain, and it was the only one that fitted a company that wanted to stand behind its people and be a pillar of its community.
We chose to grow. That meant finding out where growth could actually come from, and a churn task force, with the head of customer success and me at the same table, started with the number everyone had stopped reading.
16,825
Not this year. Ever. Churn ran at 4.55% a month that year; even the model, rounded down to four, puts the roof here. That is the roof, whatever you spend on getting new ones.
30,591
Same dashboard. Same number they had been looking at all year.
Spending more on new customers could not get through that roof.
Some of what we were already doing could not get through it either. An international push had worked by its own measures: conversion rates and customer numbers rose in the new markets. But revenue per customer there was low, and a successful team was not moving the business.
So we looked at who stayed. Firmographics on our most valuable customers, and survival curves for where everyone else dropped off. The answer was almost funny. Unbounce sold best to companies like Unbounce: ten to twenty million in revenue, past small and not yet mid-market. That became the foundation of the strategy.
Smarter marketers, or smarter machines.
That was the rule I gave the organization. Work that made marketers smarter, or made the machines smarter. If it was neither, stop.
Nothing on this list worked on its own.
People who stayed. Every reduction makes people wonder whether they are next, and the good ones have options. So I ran a rebrand, and I made the case for it as the opposite of a new logo. Unbounce felt more like a family than a business, and it needed its purpose back before it could keep its people. With the leadership team, I got in front of the whole company again and again: why we were good, why they were good, why we cared about our customers. Where it landed was one word. Unbounce could make marketers remarkable, and so could the people inside it, given a second chance. I do not think we would have kept the talent we needed without it. It is where the name of my practice comes from.
Customers worth keeping. Product, marketing and success aimed at companies like ours, where each customer was worth enough to fund the work of keeping them.
Europe, made possible. The higher-value markets were in the EU, and GDPR had just come into force. We invested in compliance so we could sell there, and opened in Berlin to support European customers in their own hours.
A product built for where the market was going. Plenty of companies were claiming machine learning. We had a real reason to use it: years of our own customers' conversion data, a data science team and a UX team. That became Smart Traffic, and then a wider push into conversion intelligence.
A price that matched the value. The plan was to move from plans toward paying for conversions. When I left, Smart Traffic was newly launched and had to prove itself first, so the price was still a plan.
The company measured itself on revenue growth plus profit margin, with a target of thirty. In 2018 the margin was 2.6%. In 2019 revenue grew 24% at a 7.4% margin: thirty-one. In June 2020, Crest Rock Partners made a majority growth investment in the company.
Source: Unbounce annual operating plan, December 2019. Canadian dollars. The investment is public.
Cutting is the default because it shows up in the near term. Growing into the number takes a strategy everyone can say in five words, and a team that believes the company is worth more than its next sale.