Hi, everyone! Today I share the mic with Ross Andrew Paquette, CEO of Maropost, which provides powerful, easy-to-use, enterprise-grade software solutions to scale your sales and marketing.
Tune in to hear how Maropost went from doing $300,000 in revenue to millions in revenue, how they achieved this without raising any capital, and how they compete with more established email marketing companies.
Download podcast transcript [PDF] here: How Maropost Increased Their Revenue From $300K To $40M+ In Just 6 Years By Hiring the Best Team!
Time-Stamped Show Notes:
- [00:39] Before we jump into today’s interview, please leave a review and rating and subscribe to the Growth Everywhere Podcast!
- [01:20] Ross started off in email sales and marketing.
- [01:35] His early goals were to build a platform, have at least ten customers, and build a lifestyle business.
- [02:30] Maropost has been around for 6 years and they want to be like Oracle and Salesforce moving forward.
- [03:03] In 2012, they were doing $300,000 in revenue and then a year later were doing $3.3 million, which continued to increase into the millions.
- [03:27] They did all this without raising capital.
- [04:07] They depended on word-of-mouth and referrals.
- [05:20] Maropost has two tools: Maropost Marketing Cloud and Maropost Sales Cloud.
- [05:29] They started off as an email service provider.
- [05:42] They’ve expanded beyond email to mobile, push, messaging, and social.
- [05:56] They have also gotten into acquisition, which means that they offer survey and form functionality.
- [06:07] Their most recent launch was for an acquisition builder.
- [06:35] They also have built-in marketing automation.
- [06:46] Overall, Maropost is multi-channel.
- [07:30] For the Marketing Cloud, their ideal customers are mid-market to enterprise businesses.
- [08:00] They also have a strong level of service when it comes to SMB.
- [08:18] Companies were jumping around from one email marketing company to another, when what they really needed was better service overall.
- [08:22] Maropost found that they provided that better service.
- [08:53] Their goal is to unseat Fusion Soft and similar companies simply by providing better, more comprehensive service.
- [09:50] Maropost started added to their list of services about two years ago; they stretched beyond email deliverability.
- [09:58] Deliverability is a key area in which to succeed.
- [10:25] Once they mastered that, the focus became product innovation.
- [10:34] They add anywhere from 5-15 features per month to their marketing cloud service.
- [10:51] The Maropost team is made up of about 175 employees.
- [11:01] They have a great tech team.
- [11:18] They also have an aggressive innovation schedule.
- [11:42] Marketing Cloud charges by email volume per month or year.
- [12:30] Most companies still charge this way, which is how they decided to structure their payment plan.
- [13:26] Their “outbound programs” are how they acquire the most customers.
- [13:38] The goal is to pinpoint organizations within certain markets and territories.
- [14:00] They are quick to adapt to shifts in the business.
- [14:12] Their average customer spends about $95,000/year on their service.
- [14:58] Mercedes-Benz now manages their email program through Maropost and came to the company through an agency partner.
- [15:10] They had previously been struggling with the platform they were using. None were producing the desired results.
- [15:22] The ROI was in the negative.
- [15:28] They now leverage everything from automated campaigns to personalized messaging through Maropost.
- [16:16] They have 85 automated paths that customers can follow.
- [17:28] Maropost focuses on helping them move the ball forward much quicker.
- [18:20] Ross enjoys the smaller business side of the business, because you can connect with them more easily and set clear goals.
- [19:23] Maropost’s biggest struggle has been on the people side of things. Managing a large number of people from a wide variety of ages and backgrounds makes things more challenging.
- [20:05] As Maropost improves, so will their people management.
- [20:18] Ross believes it’s important to have an extremely vigorous hiring process, where you leverage your core values.
- [21:05] He has rushed hiring in the past and found that it wasn’t a great fit.
- [22:05] Ross wouldn’t say he has a specific day-to-day structure; he still handles a lot of frontline areas for the business.
- [22:24] Today, his focus is to wake up and jump right into whatever is on tap for the day and go for as long as he can each day.
- [23:30] One of Maropost’s core features is a marketing automation tool called, “journeys”, which uses a drag and drop format.
- [24:07] Ross has always been interested in making their tools user friendly.
- [24:42] Ross met his co-founder on Odesk (which is now Upwork).
- [24:50] 6 years ago, he was working with someone else and the partnership wasn’t working out; he was going to shut down the company.
- [25:07] Before he shut down, he went on to Odesk to look for another developer/partner and his current partner is the first person with whom he spoke.
- [25:25] Ross considers their CTO one of the top developers on the planet.
- [26:21] Ross isn’t a reader, but he did listen to the audio of the Steve Jobs biography by Walter Isaacson.
- [27:31] The last week, Maropost started using Asana and thinks it’s phenomenal.
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Full Transcript of The Episode
Eric Siu: Yeah, and just to share with the audience really quick, Ross, and I connected a while back when I was doing some contract work. Actually, considering full-time employment at his company, and we referred Maropost in, and let's just put it this way, the referrals are exceptional at Maropost, so if you're into marketing at all, you have some kind of way to refer this to somebody else, Maropost is the company to work with there, just letting you guys know, a little nudge, so how is ... I guess, how does the tool actually, if we could dive into it a little more, how does it help people today? Let's just go into that.
Ross Paquette: Sure, for sure. So marketing, we have two products, Maropost Marketing Cloud, and then Maropost Sales Cloud. Sales Cloud being brand new. On the Marketing Cloud side of things, we did start off as an email service provider. We are email first, so that is the core, or the backbone of our product, obviously, both from a customer revenue side of things, to the main form of communication that's utilized, so really we would have expanded beyond email to mobile being pushed, and in that messaging. To social being, you know kind of, data feeds, being lead at acquisition, being Facebook custom audiences. Obviously, scheduling, posting all of the management. From there, we've gone into acquisition, so when I say acquisition, I'm referring to survey functionality, form functionality, obviously, which is standard, excuse me, landing pages, and then our most recent launch, which I believe is next week, we have a new, I guess you could say, an acquisition builder, where you're defining the strategy of how you communicate with your customers onsite, so I'm not referring to web push by any means, I'm referring to what will result in say, a light box, or a moto showing up, and how you're able to split test effectively. Target people better, I guess you could say, than just the standard email acquisition forms that most people use these day.
We also, obviously, have marketing automation built in, and we've had some major improvements on the reporting side of things, so we've just moved into a version two of pivot table recording, but really the overall is that, our platform is fully multi channel. We didn't purchase any other companies. What we're finding is most of our competitors, you know the likes of, Salesforce Marketing cloud, or IBM Marketing cloud, or Oracle Marketing cloud, the list kind of goes on there, is that they're building their tools based on acquisition, and as you focus, or as most of our customers are focusing on the single customer view, you really can't do that with a despaired system, or you really can't do that with six different solutions, or ten different solutions, which many of the times is what our customers are experiencing today, or prior to Maropost that is.
Eric Siu: Got it, and so who are your kind of ideal companies to work with, and how do you guys charge?
Ross Paquette: Sure, so on the marketing cloud side of things, our ideal customers are certainly, the mid market to enterprise, and I guess you could say that's everyone from eCommerce, publishing, automotive, travel, hospitality, being some of the key areas. Companies like Rolling Stone. Companies like New York Post. Companies like Success Publications, which is how we obviously met. These are key kind of players within the verticals that they're in. That being said, we also have a very strong level of service within the SMB market, where email is a core focus of their business, and I say that because I think what was occurring in the space for a long time is, companies were jumping around from Aweber, or MailChimp, Constant Contact, and so on, looking for better delivery, but really what they needed was a better service because their business really relied on it, so we've had a lot of success in that space, over the last, I guess you could say, three years, in an industry or vertical that I really wasn't familiar with beforehand. I think when most of people think of starting up a tech company, their main focus is how do we get the biggest companies in the world selling our solution? Sometimes the more obscure areas might produce the best results.
And now, on the sales cloud side of things, which is our new product, that really covers everybody from the SMB side of things, all the way to the enterprise side, so our goal there is not only to unseat organizations like Infusionsoft, or Entreport. It's also to unseat organizations like Salesforce, or Sugar, or Microsoft Dynamics. Or on the eCommerce side, organizations like obviously, Shopify Plus, or Magento, or Demandware, so we really are building an ecosystem, that competes with a multitude of verticals, as opposed to just focusing on one key area, and I think that's a key focus to our growth strategy over the next few years.
Eric Siu: Got it. And so for all the stuff right now, maybe to back up a second, I mean, a couple years ago when I heard of you guys, and even two years ago I guess, when we first interacted, my understanding was Maropost is just ... The kind of key benefit is making sure that deliverability, in terms of email, is very high. When did you guys start adding all of these other things? Or did you kind of have the bulk of these already?
Ross Paquette: No, we started adding them, I'd say right around two years ago, given the requirements from our customers. Deliverability is certainly a key area for any organization, at any size, in terms of their strategy. You can have all the features in the world, but if your mail is not being delivered, then it really serves no purpose. We really kind of mastered that area, and the main reason is that I've always had a deep appreciation for the fact that we don't tell Gmail, or Yahoo, or Hotmail what to do. We obviously have built a team on that front that can handle any of the requests, and the relationships that are required from it. Once we really kind of tackled that area, the focus became very much the innovation, and the product side, so we constantly add anywhere from five to fifteen features per month, into the platform, just being marketing cloud that is, which is more than most of our competitors launch in an entire year, or multiple years, as an example.
Eric Siu: That's crazy. So fifteen features or so a month. How big is the team right now?
Ross Paquette: The team is a hundred and seventy-five, I believe. Give or take a couple, yeah.
Eric Siu: Yeah. So how do you manage that? 'Cause it's, most companies like you mentioned aren't doing, they aren't pushing that hard.
Ross Paquette: I mean we have a great technology team, our chief technology officer, who is also a co-founder, is nothing short of a genius, in terms of how he architects many of these areas. To be honest with you, I think we could even be doing better than that, but I think the goal is that we have a very aggressive schedule, in terms of what our expectation is, and we also are again, very similar to how we focus just on innovation in general, we focus on innovation within our products, so a lot of the backend infrastructure, or code languages that we leverage are all kind of the newest, or the latest and greatest, I guess you could say.
Eric Siu: Got it. Okay. Great. And then going back to the pricing, so how do you guys charge?
Ross Paquette: On the marketing cloud side of things, the bulk of anybody's agreement is going to be their email volume, so they can sign up for one, two, three, four, five ... You know, five hundred million emails in a month, as an example, or in a given year. Timeframe, depending on their preference, so it does function in mainly a CPM basis, or cost per message basis.
Eric Siu: Got it. So that's interesting, right? So how did you come across that pricing? 'Cause it turns out that, that actually... That's genius that it worked out for you 'cause everybody when they ... When it comes to pricing, any kind of product at all, they just kind of look at what's Salesforce doing, or what are these other tools doing, right? So how did you come up with that? And I guess just was it successful out of the gate?
Ross Paquette: Yeah, I mean most of are ... So there are a lot of companies that are obviously doing things based on contacts. Most of the enterprise, or big market players still do it based on volume, and they always have. A few of the enterprise firms, Adobe as an example, or Adobe Campaign, they did move to a contact base, but we want to equate success to email volume, so if we're generating revenue for Maropost, based on how many emails you send, we're going to focus on not only helping you grow your subscriber base, but how much revenue are you generating? Are you managing your program successfully? Are you reengaging recipients that may have fallen off? A lot of it is tied back to that, so we really want to take part in our customer growth as well.
Eric Siu: Got it. Okay, makes sense. How are you guys, I guess, the first ... let's see ... The first hundred customers, or so ... Sounds like a lot of hand to hand combat for you guys? I guess maybe let's come to today, how are you guys acquiring today? What's the most effective stuff you're doing?
Ross Paquette: I'd say for the bulk of it is our outbound programs. We have a focus around the mid market to enterprise eCommerce players. The mid market to enterprise publishing companies, so the goal is really just to pinpoint the organizations within specific territories, and have our outbound team contact them. Now, well that it our main source. We certainly go to trade shows. We certainly run [inaudible 00:13:50]. We certainly run sponsored content programs. We have a lot of education strategies we're putting in place for 2018. We are adapting very quickly to the shifts in the business, I guess you could say.
Eric Siu: Got it. When you say. When you say in terms of mid market to enterprise deals, let's just look at mid market, what kind of deal sizes are you typically looking at?
Ross Paquette: Our average customer is about ninety-five thousand per yer.
Eric Siu: Got it. So sales cycles can be a little longer? Or you guys can afford to spend more?
Ross Paquette: It can be, sometimes it can be very quick, which is the unique component, I think that there's a lot of players in the email space, that have been around for a long time, and organizations have been on those platforms for many years, and when they see what we bring to the table. Feature, functionalities, service wise. It's something that they want to get involved with, or get onto immediately. It's not something they want to drag on, for six months, as an example. It really can go both directions [inaudible 00:14:46]
Eric Siu: Cool. I'm looking at your case studies right now, oh look, it's my podcast co-host, Neil. Let's look at this Mercedes Benz case study, so how did you guys go about winning Mercedes Benz, and what are you guys doing for them?
Ross Paquette: They manage their entire email program on Maropost, and they actually came in through an agency partner of ours, ironically, located in the Toronto area, which is where our headquarters is, but they were struggling with the email platforms that they were previously using. They had a handful of them I believe, and none of them were really producing any results, and not only were they not producing results, the ROI was certainly in a negative aspect, based on what they were paying for those platforms. They leveraged everything from automated campaigns, to personalized messaging. One of the most popular programs is certainly how they target their high profile recipients. When I say high profile, maybe Mercedes AMG buyer's as an example, you can't really communicate the same way with that type of buyer, as you would for an entry level buyer, as an example. They've really got a lot of automation, in terms of how that's managed, as opposed to again, I'd say the more manual process, that many customers still use.
Eric Siu: Got it. Okay. I'm just trying to look at the results. The results, two hundred fifty segments, and eighty-five journeys. What does that mean?
Ross Paquette: Sorry, what they're talking about is the amount of targeted groups that they're managing within their customer base, and how many automation sequences, effectively they have. They have eighty-five different automated journeys. That subscribers, customers can go down, based on again, the products, or the vehicles they're interested in, or the products they're interested in, or what might be coming up to what's most relevant to them as well.
Eric Siu: Got it. Okay, and so just these other results here, just so everyone knows. Four X industry open rates, Three X industry click rates, and there's a little nice testimonial, so you guys should definitely check that out. Going back to the early days, you were at these, we talked about Digital Marketer, and there's kind of, a lot of these competing with InfusionSoft too, and then now it's like you're talking about mid market to enterprise, right? So at some point you decided, we need to kind of go up market, what was kind of the turning point there?
Ross Paquette: Yeah, there's positive, and negatives between staying where we were, or staying where we are, and going, or continuing to go up. The positives of obviously having brand names is certainly the global recognition. Obviously, the larger the company, the more organizations want to work with us because we work with them, as an example. The downside is they move a lot slower, whether that's as you mentioned, in the contract onboarding stage, or they move a lot slower in terms of executing on some of their strategies, so one of the things that we obviously do is, focus on helping them move the ball forward quicker, as opposed to just giving them a login, and password, and saying have at it. And the other side of the coin, is you can run into more significant business fluctuations in the SMB market, right? Somebody may have a great strategy one day, and the next day it's not so great anymore, and the business starts to contract, as an example. The other side of the coin is, we work with organizations again, in the SMB market, where they've grown by ten thousand percent in twelve, and fifteen months, and as such, their email program helps them to grow there as well. There's positives, and negatives for both sides really.
Eric Siu: Okay. Makes sense. Yeah, so I guess switching gears really quick. I guess maybe even going back for a second, which one do you like more? Which one did you ... Revenue aside, which one did you enjoy more?
Ross Paquette: I enjoy the smaller business side, a little bit better because you can be closer to the business itself, or the business owner, and the focus, or effectively the goals that they have specifically. It's extremely hard to say hey, we're gonna come into Mercedes Benz, and increase revenue by two hundred million dollars, and have potentially a team on their, which is excited by that, because it really doesn't move the needle for them. Obviously, people can receive promotions. And they can do well in their careers, but there's a big difference when you go into a small business, who is doing maybe five million in revenue, and all of a sudden you've helped them grow that two twenty million in revenue, right? It's a little bit more exciting under that auspices. And again, we can have a more significant impact in working with those individuals, and helping to guide them, and utilize the strategies that we of course know will be most successful.
Eric Siu: Right, so it's the impact?
Ross Paquette: Yep, correct. Yeah.
Eric Siu: Okay. Well, tell us about one big struggle you faced while growing this business?
Ross Paquette: I think the biggest struggle we have is, the same one that many others have, which is certainly the people side of things. Managing more people is significantly more difficult today, than I think it ever has been, and I don't see that slowing down at all. We deal with Millennials. We deal with the older individuals. We deal with seasoned veterans. It's always going to be a bit of an issue, until we find the team of people who agree with everything that we are doing, and that's quite difficult. I think a lot of people started at companies thinking that it's what they wanted, and then they realize very quickly that it's not, and that's not just a Maropost thing, that's pretty much everybody, so I think that as we continue to improve that would be one of our main areas of focus, is the kind of people management area.
Eric Siu: Got it. Do you have any tips for people to get better at that?
Ross Paquette: I wish I had them because I'd be using them myself. I think the main point is to have an extremely vigorous hiring process, where you leverage your core values, and hopefully most people are building an organization, or part of an organization where they have a core set of values, that they can really look at every time they're questioning potentially a new hire. And taking those values, and again, utilizing them in the interview, and in the onboarding process because you're going to learn a lot more about an individual when you start to ask them what they feel about work ethic being a core value, or philanthropy being a core value. The answers that they provide are going to be very helpful, and I think the other key area, is to definitely take your time with it. I think for myself, I've always rushed in the interested of moving forward as fast as possible, rushed into bringing individuals on board that, had I taken a bit more time, I would have realized, okay this person is potentially not the right fit, or even better this person is an amazing fit, and thank god I'm hiring them, as an example.
Eric Siu: And that's what happens, I think sometimes we're incentivized to hire people quickly just to take things off our plate, or make things easier for the current people, but when you hire too quickly sometimes what happens is, you might put the right person, or the wrong person I should say ... The wrong person in the right seat, and that person actually tends ... That means that person can do the job, but that person is an asshole, right? So, that's what happens.
Ross Paquette: Yeah, I totally agree, and as you mentioned, that can take away basically all of that time you were looking to pass off, and literally amplify it for yourself.
Eric Siu: Yep. Which is terrible, so yes, think about your hiring, guys. Okay, so working towards wrapping up here. How do you structure your day?
Ross Paquette: I really ... I wouldn't say there's much structure to it. I still handle a lot of the frontline areas of the organization. I still do product demos all the time. I'm still involved with support all the time, our customers all the time. I'm involved with finance, and HR all the time. So there's not a lot of structure to it, it's not to say that ... that's something I shouldn't be doing, or I wish I was doing, but I'd say today, my focus is literally to wake up, and pretty much jump right into whatever I have on my plate that day, and drag that on pretty much as late into the evening as possible. I'd say that one of the core areas that I'm focusing on now is certainly, the design, and the development of again, our new sales cloud platform. I think that ... That is really the key to our future success, and future growth. Mainly, because it'd be ... The overall customer base that ... That has, versus say, the enterprise email space, so I'm heavily focused on that front, I guess is the short answer.
Eric Siu: Great, got it. Cool, we'll have to take a look at that. I mean your background, you were working at sales and marketing organizations, or you're saying you were kind of in sales and marketing roles in the past?
Ross Paquette: I was in sales previously in the past, yeah.
Eric Siu: Got it, and so Maropost is your brain child, right?
Ross Paquette: It is, yes.
Eric Siu: How does a sales and marketing guy, I guess I can answer the question from myself, how does a sales and marketing guy become this product visionary?
Ross Paquette: I think I was always interested in what would help customers the most, one of our core features, is called Journeys, or is marketing automation. It's a drag and drop format, and you can create process flows, and all that kind of stuff. And it's not to say we're the only company, that had that, but ten years ago when I first started in this space, thankfully, the company I was working at, had a lot of really unique features. Now, I don't know if any of them worked at the time, that wasn't my company, so I wasn't in control of that, but I really wanted to expand on what helped people be more efficient, so whether that was using automation, obviously, that's a key area, or whether it was making our user interface very simple to accomplish a maybe more complex task. I've always really kind of been interested in that, and not only that, I'm always interested in what others are doing, so looking at the multitude of solutions that we use today, and seeing where people are doing things well, and where people aren't doing things very well, and obviously consuming that information, and deciding what I maybe want a new feature that we're building to look like, or how I want it to function, or what functions I do want it to have.
Eric Siu: Right. I mean, I think obviously it's important to have the visionary, but you also mentioned that you have a genius, technical co-founder, so how did you go about linking up with this guy?
Ross Paquette: We actually met on oDesk, which is now Upwork, I believe.
Eric Siu: Wow.
Ross Paquette: Yeah, so six years ago, I was working with somebody else at the time, and it really just wasn't working out, in terms of, our personalities, or our focus, and I was going to just shut down the company, and said I'll just keep working, and everything was going well at the time, so it's not like it was any issue there, but yeah, I went onto oDesk, and he was the first person I spoke to, and we've been going together ever since.
Eric Siu: That's an incredible story. So, see ... That's why ... I mean sometimes people sleep on oDesk, or Fiverr, or whatever, but there's actually really smart people that work there.
Ross Paquette: Yeah. There definitely was. I would certainly consider our CTO, to be one of the top developers on the planet, and I don't say that because he's my partner, I say that just because that's the reality of what we've been experiencing, in terms of how he's able to build, and that's why we've always been such a great team as well, he knows the architecture flawlessly, and I have a firm understanding of what our customers, and the market is looking for.
Eric Siu: Incredible, so were you guys ... Was he? I'm assuming, he was probably not in the Toronto area initially? Did you get him to just move over?
Ross Paquette: Yeah, that's correct. Yeah, so he wasn't. He was located over in India, and we worked cross border, for I think three, or four years without even meeting. Three years, actually, I think it was.
Eric Siu: Wow.
Ross Paquette: Without ever meeting, and finally did, and now he is in Toronto with us as well.
Eric Siu: That's hilarious. Okay. Well, working towards wrapping up here, what's one must read book you'd recommend to everyone?
Ross Paquette: Funny enough, I am not a reader. I have tried to make my way through a couple of books, but it's not ... Unfortunately not something I've had a lot of experience in. Not so say something I don't want to change, but I've certainly listened to portions of Steve Job's biography, and I think there's some really great components out there about being ruthless, in terms of your expectations of people, and your expectations of the products, or the services you're offering. I think that the most successful people out there do obsess about the quality of their service, or their product. And I think the better you can do that, the more ... I guess you could say the more proud you'd be over the organization you're looking to build, and I think that was a again, short little blip, that I happened to listen to, that I found to be really helpful.
Eric Siu: Great, so everyone check that out. It's Steve Jobs by Walter Isaacson, I'm assuming it's that one?
Ross Paquette: Yep, that's correct. Yeah.
Eric Siu: Great. Final question for you actually, what's one new tool that you've added in the last year, that's added a lot of value for you? It could be like Evernote, but not Maropost ...
Ross Paquette: Yeah, yeah. To be honest with you, in the last week, we started using Asana, if you're familiar with them? Or Asana.
Eric Siu: Yeah.
Ross Paquette: And to be honest with you, for what we need it for, it's been phenomenal. I think we were, funnily enough being an email marketing company, we were finding ourselves managing far too many essentially tasks, or internal items within email, where it's very easy to forget that you had an email thread going, about a legal, or finance, or HR matter that you don't want to forget about, so we found that this has been a great way to essentially handle tasks internally, and we've really enjoyed it, and it's really only been I think about two weeks that we've been using it, but it solved us moving away from a lot of spreadsheets in the same format, I guess you could say.
Eric Siu: Love it. Well, Ross, this has been fantastic. What's the best way for people to find you online?
Ross Paquette: Yeah, just do ... Either come to our site Maropost.com, or to email me directly at [email protected], of course.
Eric Siu: Alright, Ross. Thanks so much for doing this.
Ross Paquette: No problem. Thanks for your time, Eric.
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