The Go-To-Market silver bullet
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The Go-To-Market silver bullet
How a 1-2 of behavioral AI & In-app nudges powered Pictory's +14% increase in Net Revenue Retention
As the GenAI-powered text-to-video tool Pictory grew at break-neck speeds over 2022, their top-of-funnel exploded. Outside of the usual channels, thousands thronged to the free and monthly plans from Twitter and TikTok.
But further down the funnel, Pictory had two new problems to solve to make their growth profitable — locking free users to paid plans (improving conversions) and making them stick around for a long time (boosting retention).
But then… the tide began to turn.
Over a 3-week window around Thanksgiving last year, Pictory saw their Net Revenue Retention go up by 14% and free-to-paid conversions grow by 38%.
What the hell had just happened? What had happened was this: Pictory had just stumbled upon a 1-2 punch that took them half a day to set up but would change their GTM game forever.
A 1-2 punch of Behavioral AI and in-app nudges.
“100x growth in 2 months? Say no more” - Pictory
But first, meet Pictory: a platform powered by generative AI for marketers, creators, and bloggers to create short-form video snippets from long-form content at scale.
Founded in 2019 by Vikram Chalana, Abid Mohammed, and Vishal Chalana out of Seattle, Pictory has been on an absolute tear - a growth trajectory that saw them grow 100x in 3 months - on the back of which they raised their $2.1M Series A round in January 2022.
Here’s their founder Vikram Chalana on Pictory’s mission for video:
"There should be a video editor as part of your office productivity suite. We saw what Canva was doing, we saw what was happening with GPT and AI in marketing and we figured there has to be a way you can bring it all together" - Vikram Chalana, Co-founder & CEO
Pictory offers a free trial to get you started with limits set against #videos generated, hours of transcription, and accessible templates. Monthly paid plans start at $23 and yearly at $19.
They rode the wave of the booming creator economy, the rise of vertical videos as search-engine indexable content, and the surge of generative AI-powered content creation.
As Pictory grew, so did their top-of-funnel - in other words, sign-ups for their free trial. They had two major growth spurts: In the summer of 2021, Pictory grew from 50 paying customers to 5,000 in two months - and continued to grow 15% month-over-month through 2022.
Pictory: + ChatGPT - name a better duo, we’ll wait
And then OpenAI announced the launch of ChatGPT.
On the back of a couple of viral videos on social media that showed Pictory and ChatGPT working together, Pictory saw a sudden surge of new users signing up for their free tier.
“We grew 15% MoM through 2022. Now we’re growing 50% every month.” - Vikram Chalana, Co-Founder & CEO
If the video-creation space was hot, Pictory was now red-hot.
The dark side of hyper-growth: High churn, poor conversions
But it wasn’t all rainbows and unicorns in hyper-growth mode. As Pictory’s top-of-funnel grew, the founders zeroed in on a few key challenges:
1. High churn - Videos are often framed as one-off projects. Once you’re done with the project, you’re likely done with the tool you used for the project, so you churn.
Paying users on monthly plans often churned before even discovering the full extent of value within Pictory.
“If you are bought into the annual plan instead, you can say, okay, I want to see how this goes if I produce videos every week or every, day. And, how does that impact my business, my lead generation, and my revenue - all that stuff.” - Vikram Chalana, Co-Founder & CEO
2. Free-to-paid conversions - Averaging over 30,000+ sign-ups for the free trial every month, Pictory looked for ways to nudge and convert their free users to paid plans. Being product-led, giving users an unparalleled in-product experience was paramount to Pictory.
And triggering a blast of e-mail campaigns and in-app nudges to anyone who signed up stood at odds with offering users a natural journey to value until they were ready to benefit from premium features.
Pictory’s vision of video is what the founders call “high-frequency videos” as opposed to “high-production videos.” Experimenting with high-frequency videos requires users to sign up for an annual plan.
With the product suite evolving over time, the Pictory team were confident that if they could get users to experience value from the product over an extended period of time, they could limit churn and boost retention.
Pictory’s Go-To-Market Stack
Pictory tracks product-usage data across all users on Amplitude - all actions, events, and signals fired by users are registered here.
They don’t have a sales team yet. All of their growth is product and marketing-led. Their GTM stack includes Zoho for CRM and Appcues for in-app customer engagement.
Behavioral AI + Nudges = BOOM.
And in mid-2022, Pictory added stardust to their existing GTM stack: Behavioral AI built on first-party product usage, CRM, billing, and third-party enrichment data to identify users ready/most likely to
Convert from free to paid plans
Convert from monthly to annual plans - to improve Net Revenue Retention (NRR) and upfront cash flow.
With Amplitude data plugged into Behavioral AI on one end and their Go-To-Market stack of Appcues (for in-app notifications) and Zoho (for CRM) on the other, Pictory set up two playbooks.
The AI qualified the highest intent users - from the free and monthly plans - and sent them once every day to Appcues and Zoho.
Playbook #1: In-product notifications triggered using Appcues to hot users most likely to convert to the annual plan (Top 150 users daily). Shown a promotion with a limited-time offer (30% discount) to move over from monthly to annual.
Playbook #2: E-mail promotions triggered using Zoho CRM to hot and warm users (Top 650 daily, ranked by intent) most likely to convert to paid plans. Sent e-mails with a promotion code attached that incentivized them to convert to paid yearly plans.
Quick aside: Pictory could have triggered the Appcues nudges to all their users and bypassed the behavioral qualification, but that comes at the cost of marketing fatigue and a damaged experience for users who are still learning the ropes of the product.
A 14% lift in NRR? Not a problem
Within the first three weeks of setting up their playbooks, Pictory saw their total conversions to paid annual plans go up - powered by a combination of their organic growth and behavioral qualification surfacing high-intent free and monthly users to be converted to annual plans.
With free and monthly users now being nudged to move over to annual plans, Pictory was now locking in cashflow upfront ($8.1K in ARR upfront, every month) while improving retention of users who might have otherwise churned off monthly plans, leading to a 14% increase in Net Revenue Retention compared to baseline.
Nudges powered by Behavioral AI + Appcues drove 38% more free-to-paid conversions in the first three weeks alone, against a control group of randomized users who were also shown the nudge.
"Our conversion rates have improved for people to who we show the nudges, and we've had some validated data on that. On top of that, we’ve had more people move over to annual plans, which helps increase our net revenue retention." - Vikram Chalana, Co-Founder & CEO
Net Revenue Retention is the gold-star metric for the very best in SaaS.
77% of Datadog’s customers use 2+ products, while 31% use 4+ products - at an NRR of 130%.
Figma’s Net Revenue Retention at the time of acquisition (still hurts) was 150% - best in class, hands down.
Cloudflare - 126%
Gitlab? 148-152%. We can keep going.
While top-of-the-funnel growth has been staggering for GenAI companies, it has failed to trickle further down the funnel into revenue growth. It’s a common perception that monetization isn’t a figured-out science for these tools just yet.
One way to approach GTM is to be broad-brush and use a one-size fits all approach for your freemium user base in an attempt to drive your revenue motions: conversion, expansion, and churn reduction.
But if we’ve learned anything from SaaS’s shift to product-led growth, it is that GTM wins on hyper-personalization. And the what, when, where, and how - of all your marketing, sales, and sales-assist touches need to feed off of product usage, firmographics, and demographics to drive your monetization engine.
And over a three-week window around Thanksgiving in 2022, Pictory made monetization what it apparently wasn’t: a figured-out science.
The Go-To-Market silver bullet
Great post!