Case study 6 Buffer: from idea to paying business customers in seven weeks
This case study features a B2B service used for managing and tracking social media updates. It illustrates success factors for an agile startup business developing into a profitable mature business that adopted a data-driven mindset to drive growth. The founder believes in ‘radical transparency’ to openly share tests and insights, and this makes it a useful case study to learn from since interesting details are often not revealed in other cases.
Joel Gascoigne formed Buffer in Birmingham in the United Kingdom. The initiation of the company was data driven. From his ‘lightbulb’ moment of a service to improve social sharing and scheduling, his minimum viable product (MVP) was a landing page to assess interest in the service. Initial registrations and feedback via Twitter were sufficient for him to commit to launch the project and he personally designed and built the first version of the Buffer application for using with Twitter over seven weeks, as described by Buffer (Gascoigne, 2011). Today it supports Instagram, Facebook, Pinterest and LinkedIn also.
Buffer’s value proposition
Gascoigne describes his vision for the product like this:
I wanted to take the scheduling feature of many Twitter clients and apps and make that single feature awesome. I believed that single feature was worthy of its own application. The aim was to create something genuinely useful with a delightful experience. The fundamental idea was to create a way to queue up tweets without scheduling each tweet individually.
After the initial landing page test was validated, a further test was run to assess how much people would be prepared to pay. A freemium revenue model was devised where there was a free service that businesses could subscribe to, with more advanced scheduling available for subscribers to paid plans. Gascoigne found that sufficient people were clicking on the details of the $5 and $10 per month plans to suggest some people were prepared to pay. Today, payment plans vary from $15 to $99 per month.
After reaching a critical mass of registrations, Gascoigne built and designed the first version of the application software during evenings and over weekends over a span of seven weeks. This again used the MVP concept to minimise features, but show a clear benefit for the paid plan. Initially, Gascoigne was bootstrapping the company by working on web development contracts at the same time.
Figure 6.17 Buffer’s value proposition
Description
In 2016, Buffer would extend the proposition to social media customer service by launching a ‘Reply’ feature based on an acquisition of another company. Ultimately that was not successful and in 2020 Buffer retired that feature.
Today, Buffer’s value proposition communication (Figure 6.17) centres on the marketer’s ‘use-case’ of managing social media as part of marketing campaigns. It offers to ‘Plan and analyse your campaigns’ by scheduling, tagging content by initiative and reviewing work in detailed reports. It also offers ‘auto-scheduling’ and recommendations on when, what and how often to post to maximise audience engagement.
The company has also somewhat reduced the functionality of the free plan and in 2018 it highlighted some of the limitations of the freemium model, which incurs costs for supporting free users and providing the service to them. At this time, according to Buffer (2020) it had:
•30,000 people signing up for a free Buffer account every week;
•1,000 requests for help every week from Free users;
•80,000 paying customers and over 300,000 active Free users.
Launch and marketing to achieve growth
On launch, Buffer found that, with the initial pricing, there was a 4 per cent conversion rate from the free plan to the paid plan. The first paying customer was achieved after four days of launch and within a few weeks users reached 100, and then increased to 100,000 users within the next nine months!
As new customers subscribed, Gascoigne resisted the temptation to simply build more features; rather he assessed the business model, including marketing and customer development. Gascoigne notes:
After the first paying customer, I took a step back, acknowledged that as a major milestone and decided a slight shift in focus was required. As a developer, it is easy to pile in more features at that point. I knew it was time to focus on marketing and further customer development. It was time to keep the balance of development, marketing and customer development with a product which had proved it was ‘good enough’.
By early 2011 the company reached what Gascoigne (2020) describes as ramen profitability, i.e. where you’re making just enough to pay your living expenses. For him, that first goal was £1,200 per month.
In July 2011, the co-founders decided to move the startup venture from the United Kingdom to San Francisco in the United States, and Buffer was converted into an incorporated business and received investment funding to grow further.
By October 2012, it was reported on Buffer’s blog that ‘1.5–2% of users are on the paid plan, predicting $800,000 in annual revenue’.
Soon after, Buffer intentionally made its salary calculation algorithm public, which it still does today now it has reached 90 employees.
Buffer does not employ most of its 90 employees locally. It has had a remote workforce since 2012 when the decision was made to run Buffer as a virtual business, predating the approach that was later enforced on many businesses by the global pandemic. One technique used to develop a feeling of belonging in the remote team was to develop 10 shared values:
1Choose positivity.
2Default to transparency.
3Focus on self-improvement.
4Be a no-ego doer.
5Listen first, then listen more.
6Have a bias toward clarity.
7Make time to reflect.
8Live smarter, not harder.
9Show gratitude.
10Do the right thing.
Buffer’s social media and content marketing strategy
As might be expected from a company offering a service for social media marketing, social media has been important to the growth of Buffer. Its success in social media for a B2B service is suggested by over 1 million Twitter followers, 200,000 followers on Facebook and Instagram, and a further 40,000 page followers on LinkedIn. Ultimately, its success in social media has been based on its content strategy. Since launch it has had an active blog telling the company story, but also providing guidance for marketers about how to improve their social media marketing and marketing more broadly. As well as blog posts covering best practices for digital marketing it has also created a ‘Library’ section to educate on marketing techniques, including templates to help marketers manage their social media marketing and campaigns.
Listed are some examples of resources published by Buffer that are indicative of the content editorial schedule it has developed to support increases in awareness. These types of content offering value evidenced by a ‘clickbait’ B2B title can help attract visits at low cost by social media amplification as they are shared online, and they can also potentially attract visits from organic search and backlinks from other sites:
How to Use Facebook to Market Your Business. Article in the guides category covering best practice, repeated for other social networks.
Why We Have Our Best Ideas in the Shower: The Science of Creativity. From the self-improvement category, offering to teach and inspire.
We Analyzed 43 Million Facebook Posts From the Top 20,000 Brands. From the trends category, which shares the latest data and approaches, including sharing learning from its own anonymised customer data.
Nike’s Secret to Success on Instagram: Building an Engaged Community. From the case studies category.
Marketing automation to support customer development and retention
Since new prospects and customers sign up to Buffer via their email, automated emails are a key technique to welcome prospects and develop its customers. The email sequence from Buffer for people using the free platform or trial has included:
•A welcome email from a team member recommending initial usage to schedule a post.
•A second email offering to ‘Use Buffer to grow your reach, engagement and sales’.
•A third email featuring customer testimonials linking to the Analytics reports.
•A fourth email offering to teach: ‘3 things top social media marketers do’. . . naturally Buffer facilitates these.
•Other emails include practical actions of downloading the browser extension to make scheduling of curated content easier and downloading the mobile app.
•Monthly reports.
•Feedback on customer successes, highlighting social shares that performed well, and encouraging people to learn more.
Conclusion
At the end of 2020, Joel Gascoigne wrote a retrospective blog article: ‘Reflecting on 10 years of building Buffer’ (Buffer, 2020). This illustrates the opportunities and challenges faced by an online startup business and the need to adopt an agile mindset to respond to changes in the marketplace, most recently caused by the pandemic. Gascoigne also talks about some of the rewards and pressures of running an online business:
In the early days, it’s easy to treat a startup as a sprint, but it’s really a marathon. It’s vital to pace yourself and take care of yourself. Regular rest is a necessity, and I’m going to continue to work towards incorporating rest and true vacations into my annual cycle. Additionally, as with life, there are seasons to a company. There have been stages of growth, market changes, and role evolutions. There are always periods with different focuses, and it is a continual journey towards ideal equilibrium.
I’ve learned that it’s hard to grow without compromising, and after doing so, you might have to work to find your purpose again. This is an example of the hard work it takes to create something enduring. If you are to be successful long-term, you have to take time to reflect and rediscover your passion, and sometimes make some bold changes to get back on track
Explain the data-driven customer acquisition and retention techniques that Buffer used to grow the company. How has Buffer used social media and content marketing to grow the business?