SaaS Marketing Success: Output.com Raised $45 Million in Series A Financing

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One of our top SaaS clients, Output.com, just raised $45 million in Series A financing – a major milestone for them and for us at Hop Online.

See how we got started with Output 4 years ago, how the SaaS opportunity emerged, and how we helped them scale Arcade from 0 to 100 000 customers in just 2 years.

7X ROAS for Output’s Software Campaigns

Output came to Hop Online in May of 2017 with cutting edge music software products and a straightforward goal: Sales growth.

We started by completely restructuring the Google Ads account. We surfaced thousands of new, relevant, long-tail keywords, organized and individually mapped every keyword to one of Output’s product lines, creating micro-targeted ads. We used cross-platform retargeting to sell Output’s software and hardware offers.

Next, we launched Facebook campaigns using high-quality videos and creatives, supplied by Output’s team. Using custom audiences made up of Output’s customers, we were able to locate similar “lookalike” prospects on Facebook, who engaged actively with the ad creatives and purchased at a profitable rate.

The software campaigns went phenomenally well, reaching 7x and 8x ROAS for well over a year. This profitable growth enabled Output to re-invest in both new product development and in scaling its digital marketing.

Enter SaaS: Establishing Product-Market Fit and Unit Economics

In June of 2018, Output launched its first SaaS product – Arcade. Hop Online was running ads to promote it and applying our analytics and UX knowledge to optimize the entire buying experience.

We successfully took all our learnings from the paid marketing software campaigns over to SaaS.

The first 8 months were focused on figuring out the technical issues around tracking subscriptions and payment processing – an essential step for high-performing organic and paid traffic. We experimented with the free trial’s length to acquire the most subscriptions within the acceptable lowest customer acquisition costs (CAC).

Once we felt that we had a product-market fit, churn was at an acceptable level, and the entire sales process was running smoothly, it was time to scale.

Our focus shifted to establishing true unit economics and optimizing all our campaigns for paying customers and not for tire kickers.

With SaaS software with a free trial, we needed to calculate the customer lifetime value – the recurring revenue from the subscription service, and measure it against the CAC for each campaign. This way, we could see the true picture of ROAS and decide which campaigns to expand.

Rapid SaaS Growth: Scale Campaigns, Add Channels, Expand in New Markets

At this stage, our goal was to manage the LTV: CAC ratio while scaling rapidly.

We added YouTube and Bing ads to the marketing mix. High-quality creative fueled our video advertising on YouTube and Facebook to generate demand.

Using YouTube as the main discovery channel, we were able to test multiple audiences – both in-market segments and custom. We were experimenting with content lengths and types, from artists’ testimonials to lines within Arcade.

We continued with keyword expansion with Google Search ads, uncovering more specific, long-tail keyword opportunities. By targeting adjacent keyword groups, we were able to capture people looking for similar products, while continuously testing new ad copies.

Personalized landing pages for different music genres gave us more relevance for specific audience segments. With them, we were able to discover and capture sales from huge audiences of music producers unfamiliar with the brand.

Once we’ve saturated the US market, we started to expand internationally with Facebook and Google ads. We did multiple lift tests – stopping and re-launching campaigns to measuring the effect of different marketing channels on the total results per country. This way, we could determine the optimal marketing channel mix for each of the new country markets.

The combined effect of these marketing efforts kept us above 1000 daily subscriptions for about a year – driving rapid growth while maintaining a healthy LTV: CAC ratio.

The SaaS Growth Marketing Formula

Here is the formula for success with Arcade over the past months, that got us from 0 SaaS customers to well over 100 000 subscriptions.

Arcade is a new kind of music software, in many ways in its own vertical. It’s way more than just loops and FX – Arcade is a sample playground with 40+ product lines and all the tools a music producer might need to manipulate and transform the sound.

In a nutshell, we’re using great creatives for video advertising on YouTube and Facebook to generate demand and educate the audiences. Next, we target mid-funnel audiences with adjacent intent. Finally, we capture these audiences down-funnel with branded terms, as people are becoming more aware of thе product, its features, and how it helps them make music.

We’re leveraging what we’ve learned throughout this process – tackling attribution problems, figuring out the optimal price point and trial period, audience segmentation and targeting, creatives and ad copy, lift tests, and new markets – to drive exponential growth for Arcade.

Collaborating with Output on this tremendous journey, we now have a war chest of marketing resources to really put our foot on the gas and get to the next milestone. Stay tuned for more!

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