In this episode, Sahil Patel, CEO of Spiralize, discusses predictive conversion rate optimization for B2B SaaS companies.
What Spiralize Does:
- Spiralize offers predictive conversion rate optimization by scraping and analyzing A/B tests from 34,000 websites.
- They identify successful A/B tests and implement them for clients to optimize conversions.
Understanding A/B Testing:
- Sahil explains A/B testing using the analogy of a clinical drug trial, emphasizing the importance of statistically significant results.
Scraping and Analysis Process:
- Spiralize utilizes their proprietary software to crawl the internet, capturing visual differences in A/B tests.
- They identify common elements across successful tests to determine proven winners.
Expertise and Value Proposition:
- Sahil highlights the expertise Spiralize brings by analyzing data from thousands of websites, providing insights beyond what individual companies can achieve.
- Spiralize offers a blend of product and service to address the challenges and complexities of A/B testing.
Customer Base and Business Model:
- Spiralize primarily serves B2B SaaS companies with at least 500 employees, spending $50,000 to $70,000 monthly on marketing.
- The company operates on a performance-based model, starting with a 90-day pilot followed by a monthly fee.
Acquisition Strategy and Market Focus:
- Spiralize relies on client referrals and relationships with CMOs, leveraging the frequent job changes in the industry.
- They target the B2B SaaS market due to its relative newness in conversion rate optimization, offering more opportunities for growth.
Team Structure and Engineering Role:
- Spiralize employs a team of software engineers to improve their proprietary software and assist clients in building and running A/B tests.
- Engineers focus on implementing significant changes in user experience rather than minor adjustments, maximizing impact.
Future Vision and Goals:
- Sahil envisions CRO becoming as essential as SEO, with Spiralize leading the industry in the next five to ten years.
- The company aims to democratize conversion rate optimization, making it a standard practice for all websites.
Transcript
Hello, everyone. Welcome to the B2B SaaS podcast. I'm your host Rupesh Javvarman. Today we have Sahil Patel here with us. Sahil is the CEO of a company called Spiralize. Hey Sahil, welcome to the show.
Sahil Patel:Hey, really glad to be here. Thanks for having me.
Upendra Varma:All right, Sahil. So let's try to understand what Spiralize does, right? And how you sort of, you know, help your customer base.
Sahil Patel:Yeah, so we do predictive conversion rate optimization for B2B SaaS companies. There are 34, 000 websites that run A B tests somewhere on their website. We scrape all of them. We find the best A B tests. We shamelessly borrow them and we run those tests for our clients.
Upendra Varma:So explain more, right? So what do you mean you scrape APTest, right? So I think the way I understand people run these APTest is, hey, you, you have a period, like you have a timeframe where you're running some, showing something for like 10 days and something else for the next 10 days, and then they're sort of looking at metrics and all of it. Like, how do you
Sahil Patel:that's not a B testing. That's actually not a because it's something. I'm not sure what that is, but that's something else.
Upendra Varma:so what, what do you mean maybe testing in
Sahil Patel:uh, so great example of a B testing. I'm going to step outside websites and digital and everything else for them. Think about, uh, like a clinical drug trial. You have a new medicine. What you do is you get a representative sample of people, men, women, young, old, all those things. And half of them get the drug and half of them get what's called a control. Which is a placebo and at the end and you gotta make sure you run it from like say the start of the month to the end of the month and then at the end you compare how many people got better. Was there a better outcome and what you're looking for is a difference because even in a placebo about maybe 5 percent of the people just get better on their own. So you gotta try and beat what's called beating the control. Now I'm starting to use a little statistical language. That's what we're doing. We're running those like a drug trial for your website. So let's say you're a B2B SaaS company and you want to get people to sign up and do a free trial of your product. Tons of companies do that. We're going to make two versions of the page. Now you definitely had that part right. And then for, let's say a month, half of everyone will randomly get the normal version of the page. But it's really important during that same time cohort, that same month at the same time, randomly, half the people will get the other version. And you're going to compare, did you get more on. The B. Or did you get more on the A? That's an A B test.
Upendra Varma:so my question is like, what do you mean when you say we're going to scrape 34, 000 websites and understand
Sahil Patel:do we scrape? Yeah, so we've built our own. This is our own sass product and it crawls the Internet and it finds anyone any website that's running a what's called in browser some people client side testing and that's the first thing we do to We capture the visual image capture. We can visually see the difference between the A version of a page and the B version of a page. By the way, you could do this right now. You could go to a website, you could open it in two different browser windows, and see, is there an A and a B? Now you know they're running a test. Now, anyone can do that. We've automated it, so we're doing it at scale. The third thing we do, and this is where there's some special sauce. Capture and find the common elements across all these tests. Because if one company runs one test, so what? I'm not running to tell everyone out to go copy it. If we see 10 companies all run the same test and they converge on an answer, that's what we call proven winner. Those are the kind of tests we like to run.
Upendra Varma:Okay. So I know I sort of get a sense of, you know, what you're trying to do here, but I just want to, you know, get into any specific example here. Right. So what does that mean? Let's say I'm, I'm a SaaS company, right. And I just want to optimize my pricing page so that, you know, more, more people sort of signs up for example, right. So there are going to be a bunch of templates that I could see, you could just put all of them, you know, in, you know, stacked, or you could have them, you know, sorted in vertically, horizontally, sort of various templates that I could get, right, maybe hundreds of examples, right? So, yes, I could run my own A B test and maybe could figure it out for myself. So what sort of expertise are you bringing in by analyzing these 34, 000, you know, sort of companies or websites?
Sahil Patel:yeah, why not do it on your own if you've yeah, by the way, there's some great self service tools you could do out there. Here's the challenge. First, testing, A B testing is a cruel game. Industry average, only 10 percent of tests actually win. So think about that. If you, if that, those are not good odds. Okay. If you, if you went to the casino and you, whatever your favorite game is, let's say it's blackjack. You had to play 10 hands to get one win. You're going to run out of money really quickly.
Upendra Varma:Sure. But, but, uh, okay. Makes, makes a lot of sense. I'm, I'm still sort of, I think I just want to get a sense of it. Right. So this is still a service that you provide. Right. So there's still some manual.
Sahil Patel:It's both. Yeah, it's a, it's a product and a service. It's both bundled together.
Upendra Varma:Okay. That makes sense. Because yeah, I mean, I could see how you like, it's pretty hard for a product to do it out of the box. Right. So then how could you even do that?
Sahil Patel:Yeah. Well, it's not that it's hard. It's that the odds are not in your favor. Number one. Number two, let's say the average company. You got to get a whole bunch of people in the room and agree on what test to run. They didn't even know what the test should look like. Everyone's got an opinion. The design guy has an opinion. The product gal has an opinion. CEO walks in the room and goes, Oh, I heard if you put the CEO's dog on the homepage. Conversions will be through the roof. And what you end up doing is testing based on opinion. Or even worse, you get someone with just a little bit of knowledge, and they think they've got best practice. What they're really doing is testing based on instinct. They go, Oh yeah, I've been, I've been doing digital for 10 years. I know we should make all the
Upendra Varma:So in this particular scenario, right. So how would you help that particular customer to get out those top, you know, and number of tests to run. So what exactly would you do and how exactly do you do that?
Sahil Patel:Yeah, we'd come in and say, Hey, we've looked at 30, 000 websites. First of all, do you think anyone in the room has personally looked at 30, 000 websites? No, it's not possible. Second thing is that we've clustered them and we've looked at just the companies in your vertical. Number one, we've looked at just people that ran tests on homepages. And we've looked at just the companies that offer a free trial. And we've identified these seven tests. And we know how often they win and how much lift they should produce. Lift just means how many more conversions you're getting compared to your control.
Upendra Varma:But how do you get that data? The whole conversion data, that's still an outcome that, that only the not destiny company sort of can,
Sahil Patel:Ah, yes, yes. So I love that question. How do we know the stats? Because the scraping of the Internet, what we're looking for signals. There's a ton of noise. gives us valuable signals. When we find something that repeatedly wins, we then run it for our clients. We're the largest test in the world. Tremendous scale. Because of that, we've run tens of thousands of tests. We've been doing this for more than eight years. When we run tests, that's the first party data. We know the exact statistics. Of the performance of each test.
Upendra Varma:So that's the sort of expertise that you're bringing in, right. That a typical SAS company wouldn't have. Right. So that makes a lot of sense. I talk about the
Sahil Patel:Plus, we've got the in house service team. So we've got the in house designers, UX, UI, copywriters, full stack engineers to actually build the test.
Upendra Varma:Yeah. So I'm going to come to that. Right. So I just want to get a sense of your customer base today. Right. So who are you primarily serving to and like how many active customers
Sahil Patel:Um, yeah, so, um, we've served thousands of customers. I have to be careful here. I can't, I can't reveal kind of our exact, uh, customer account, but the typical customer is a B2B SaaS business. They've got at least 500 people. And a great indicator is that they're usually spending around 50, 000 to 70, 000 a month on marketing to get traffic. Could be SEO, could be search engine ads, could be social media ads to get traffic. Why do we use that? It's because it's a signal They've got a high value conversion and they've got a maturity about their marketing function. Is the first problem most companies have to solve is get people to come to your website. You can't really, you can't do what we do until people are there. Our job is to take the traffic you already have and get more of it to convert. But if you don't have any traffic, we can't really help you.
Upendra Varma:Makes sense. Can you just sort of, you know, give a very broad range, right? Whatever you're comfortable with. I've been talking about 100 customers or 500, 000 customers. What's that number look like? Or is it just five or 10 handpicked companies that you work with? So that we could sort of, you know,
Sahil Patel:yeah.
Upendra Varma:the scale at which you're operating.
Sahil Patel:you this. Yeah. At any given time, we're working with about a hundred.
Upendra Varma:Yeah, that makes a lot of sense. Yeah. Uh, and talk about the business model here, right? So, how does this work, right? If I'm a B2B SaaS company looking at your service, right? So, how do I engage with you? Is it a one time thing that I run, figure something out, and then I just go, or like, do you, like, how do you keep me, right? So, how, how long does a typical customer stick with you, and like, how does that engagement model work?
Sahil Patel:Yeah, it's interesting because it's a, it's a hybrid business tech enabled. Um, it's not like a typical SAS product where we sign you up and we hope you stick around for five years and we create a long term contract and try and lock you in. It's just not the nature of what we do. Uh, by the way, I ran a SAS business for 11 years before I ran Spiral Eye. So definitely know that model really well. All of our clients start with a 90 day pilot. And the fee is a performance fee based on how much conversion lift they pay. And if we get them no lift, they pay nothing. We get a little lift, they pay a little. And to earn our full fee, we have to get them at least 30 percent conversion lift. It's a good number. You know, if you go to your average chief marketing officer and you tell her or him, we'll increase your pipeline by 30 percent on your highest value conversions, that tends to get their attention.
Upendra Varma:Yeah.
Sahil Patel:So that's the 90 day pilot. After the pilot, it's a simple monthly fee,
Upendra Varma:Yeah. And then click. Okay. And then based on like how long they stick with you, they just keep on paying you, right?
Sahil Patel:Yeah, if we're getting the lift, they're happy to pay. I like, there's a good phrase, when you find gold, you keep digging.
Upendra Varma:And just, just to get a sense of, right, so for example, if a customer were to stick with you for 12 months, right? So how much would they pay you on an average, I know there's going to be a spectrum and all of it, but what
Sahil Patel:there's no spectrum. Everyone pays the same amount. Actually, it's on our website. It's 25, 000 a month.
Upendra Varma:A month. Okay. So basically you said that for the first 90, 90 days that you do the pilot with them, right? So I think it's, they could just pay you nothing if you don't showcase any good results, right? But that changes after that 90 day pilot, right? That makes
Sahil Patel:Yeah. So at the end of the pilot, we add up the results and then they pay us a success fee. And then the vast majority go, wow, this thing really worked. Let's keep going.
Upendra Varma:sort of help us understand your sort of acquisition strategy, right? So where you're finding all of these clients and like, how does it all work for you, your own marketing. As
Sahil Patel:Oh yeah. You know, I just sit back on the couch and people call us now. I'm just kidding. Um, look like any other business, early stage growth business, you gotta, you gotta work multiple channels. So first for the, I mean, the best source of, of business client acquisition is, uh, client referrals. Some, we do great work for a chief marketing officer and he or she tells their peers CMOs. They talk all the time. Number one. Number two, we sell into the marketing office on average. These people change jobs every 18 months. And if they're happy with us, they get to their new job and they call us. So that's the, um, those are the two biggest sources of business for us. We also are always trying out different channels, you know, outbound channels, inbound channels, advertising. Our business is very much, it's a niche. So, you know, kind of running ads. Um, we haven't gotten kind of a lot. There's not a lot of. We haven't seen kind of great traction on typical advertising channels.
Upendra Varma:know, why just B2B SaaS, right? So is there, you know, why just this particular market, right? So what, why, why that positioning
Sahil Patel:Yeah. Um, there's two reasons. The biggest reason is that it's an untapped market. So e commerce discovered CRO probably about 10 years ago, and it's a very competitive space. And B2B SaaS is much newer to the game. So there's more low hanging fruit and there's more market share to be gained.
Upendra Varma:makes a lot of sense, right? So I talk about your team today, right? So I see you, you've got a lot of engineers out there, right? So what do they do in this setup, right? I mean, you're, you're more like a marketing agency, right? You know,
Sahil Patel:Uh, we're not, we're not. Yeah. I wouldn't describe us that way. Uh, we're a tech enabled service. Um, that's why we have a lot of software engineers. We have our own SAS product. We bundle that with the service team.
Upendra Varma:so, okay.
Sahil Patel:a bit of a hybrid business.
Upendra Varma:Yeah, just talk a bit more about that, right? So what are these engineers spending all of their time on it? Are they building on and improving your existing software product? Or are they doing something else for your client, for example?
Sahil Patel:So we do. We do have. So I think you've picked up on something really good. So we do have a big team of engineers that are building our software product, making it better. Um, then we also have engineers who are working with our clients to build and run A B tests for them.
Upendra Varma:Okay. And what sort of tests are these that you would need a good software engineer to come in and build? So what sort
Sahil Patel:Oh, I love that. You asked that. It's a great question. Defender. So, um, Here's what I think most people think of A B testing for a website. They think, oh, okay, I'm going to take a page and I'm going to change the color of the button. I heard that if you make the buttons orange, more people will click. Now it turns out, but you're, you're welcome to try that. Those tests are largely a waste of time. I call those meek testing, M E E K, meek testing. Meek is weak, doesn't really move the needle for anyone. And you're really just wasting your time. What we do are big swing tests. We're reimagining the entire user experience on a particular page, the overall composition of the page, the imagery, the copywriting, the product claim, the form design, the layout, the flow, all of the social proof, testimonials, all of those things together. Um, Now, to do that, you got to write HTML code to do that number one. Number two. Once you find a go ahead, please.
Upendra Varma:So I'm just trying to understand that you take over a company's marketing website or their website and then you sort of rebuild it for yourself until something clicks.
Sahil Patel:I wouldn't describe it that way. So we're certainly not overtaking taking over anyone's websites. We are giving them a plug in tool. And by the way, I just want to make sure you keep an eye on the clock. I know we've we've booked. So we've got I've got about two or three minutes left. Um, we're giving them a plug in tool piece of JavaScript code that will actually trigger the test. And it automatically gives half of the audience one version of the page, half the audience, the other version, and then it keeps track of what happens, who converts. Um, so that's how we're actually doing now inside the testing consoles where we build the test.
Upendra Varma:Yeah. Makes sense. And so I have one last question. What's the vision here? So where do you see company in the next two to three years? What's the big plan and what are the next milestones that you're sort of You know, aiming to fit.
Sahil Patel:We're going to take over the world. Our goal is that, in my vision, is that CRO, conversion rate optimization, is roughly where SEO was 20 years ago. 20 years ago, some people did SEO. It was leading edge. Not everyone even was told that you needed to do it, much less what was the right way to do it. Today, I can't imagine a B2B, much less any website not doing SEO. So today there's a small sliver of companies that do CRO. In the next five to 10 years, I think everyone will do it. Not everyone will do it with us. That's fine. Um, we think we're, we're the best option. If you're serious, you want to swing big.
Upendra Varma:That makes a lot of sense. Thanks, Sahil. Thanks for taking the time to talk to me. Hope your skills finalized to much, much greater heights.
Sahil Patel:Oh, you're welcome. Thank you. And you're, you're a great host. Really enjoyed the conversation.
Upendra Varma:Thank you for that.