How Embedded Upsells Drive Crunchbase's 50% Growth
The most important growth lever for any PLG company
After a long hiatus we’re back(!), and with a new content strategy, diving into B2B monetisation & pricing strategies.
Today, we’re looking at Crunchbase’s use of embedded upsells, and how they were used to raise $100m+ for a company providing information on startups such as amount raised, their investors, and contact info for their key employees.
In the next four minutes I’m going to teach you:
Who Crunchbase are
What embedded upsells actually are
How Crunchbase use them to drive revenue and
How Crunchbase could improve their embedded upsells
Who are Crunchbase?
Crunchbase was founded in 2007 by Michael Arrington, as a simple crowd-sourced database for his blog, TechCrunch (yes, that Techcrunch). The idea was to create a place where information about startups and the tech industry could be shared and updated by the community. However, the platform quickly grew beyond its initial purpose, becoming a standalone company in 2015.
Given their community origins it may be no surprise that Crunchbase have a really good free product, and as a result, boast a massive PLG funnel with 25m site visits per month!
However, free traffic doesn’t always equal revenue. The key factor to Crunchbase’s survival lays in getting these free users to convert to paid plans and identify opportunities to upsell into the enterprise. This is where embedded upsells come in.
What are Embedded Upsells?
Imagine yourself using an email marketing software. You’re currently trying to add another email account but you’re at your plan’s limit so when you click “add email account” you’re shown a paywall with a message stating you’ve reached capacity and a conveniently placed button prompting you to upgrade.
Think about this as a friendly nudge from a customer support rep letting you know you can’t currently do what you want and providing a possible solution. Contrast this with traditional paywalls that are thrown up immediately upon opening the product when you’re just trying to get some work done and you can see why a high context paywall can be so powerful in driving conversions.
How Crunchbase are Using Them
Because of Crunchbase’s huge free pipeline they’ve built embedded upsells into their product in an impressively thoughtful and native way. You’ll see paywalls if you try and view (a) any emails of employees at said company or (b) view more than the 10 most recent investors, both core actions of the product.
One of the worst kept secrets in monetisation is increasing paywall views. Revenue moves almost linearly to paywall views, so showing them repeatedly is key to driving trials and expansion revenue as 90+% won’t opt-in the first time they see a paywall, with the average trial opt-in sitting at 3.8%.
However, it’s also typically all or nothing - either a user upgrades or eventually gets so annoyed they’ll churn out. Embedded upsells instead offer Crunchbase a few key benefits:
Engaged users will see just as many paywalls, with the added benefit of being more compelling because they have just explicitly asked for the premium content
Allows Crunchbase to reduce product complexity and progressively disclose features to only the users that will care about them. A salesperson looking for the CEO’s email likely doesn’t care about the VCs that have invested.
Avoid throwing a barrage of paywalls on users not ready to upgrade or looking for complex info, and risking frustrating them to the point of churn
Targeting users in this way has shown to improve engagement by as much as 300% and especially effective at driving net revenue retention, encouraging users to move to more expensive tiers as they find greater value in the product.
How to Improve
Now, onto the fun stuff - how could Crunchbase improve? Whilst they do a good job of embedding upsells into the core product experience there are still a few key areas to focus on:
Identify Enterprise Expansion Opportunities
At Crunchbase’s scale it’s no longer enough to convert a user from free to paid, they need to use that customer as a wedge to sell an enterprise package. How? The old way includes AEs manually reviewing accounts to determine which might be interesting or custom lead scoring models. New companies like Istoria improve upon this and can automatically show paywalls prompting an enterprise sales discussion to users who have the job title manager or above, at large companies (e.g. 150+) with high product usage.
The importance of this? If 3% of Crunchbase’s userbase are managers at 150+ person companies and have a close rate of 33% that’s an LTV increase of 20%! Goes to show how important the change could be…
Improve Paywalls
Their paywalls are weak and could certainly use some work.
Benefits: The benefits of the Crunchbase pro aren’t clear when you are asking to view a full list of investors - “find and close deals faster”, what does mean, what features do I actually get? It gets worse, with the main copy being hidden only to be shown if a user scrolls…
CTA: CTA changes are deceptively powerful and right now it’s not clear what will happen if I click “Start Free Trial”. To increase trial opt-ins look to include a more active CTA with possessive phrases (e.g. Unlock Your Contacts) and tells a user whether a credit card is required or if they just get this free trial with one click.
Trial Length: Whilst Paywall 1 clearly tells you what you get in the trial, 10 free verified contacts, Paywall 2 misses this nor does it explain if it’s a time or usage-based trial. Blinkist meanwhile saw a 23% increase in trial sign ups, a 1,200% increase in notification opt-in rate from 6% to 74%, reduced customer complaints by 55% and even increased free trial conversions by explaining how their trial worked and let customers know they would be reminded before their trial ended.
That’s it for today folks, if you enjoyed today’s newsletter and are interested in best practices around B2B Software Pricing a subscription would be greatly appreciated!
Congrates ! Really interesting !