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How Retention.com scaled from 0 to $22m ARR in 4yrs
+ RB2B spinoff growth moves to $6m ARR by end '24
Okerosi Davis
April 30, 2024
Hello, welcome to Product In Reverse - unbundling SaaS growth from a product marketing angle. The goal is to extract marketing insights for startup founders, product marketers, and creators from those in the trenches every day.
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Today: How Retention. com went from 0 to $22m ARR.
Retention.com's identity resolution software helps Shopify merchants recover lost shoppers and increase Klaviyo flow revenue by 2-3x. We expand your email list by identifying website visitors, even if they don’t fill out a form.
The Backstory
Adam Robinson had been running a boutique email marketing software company taking the likes of Mailchimp and Constant Contact. After almost a decade in the business, the best Robly Email Marketing would do - topline was $3m and bottom line $1.5m recurring revenue.
Adam, his brother, and best friend - the three co-founders exited the business in 2021 to a private equity fund.
Going back to November 2019, Adam had been in the weeds spying on Mailchimp. He was trying to figure out what this email marketing software giant was not doing in the space.
In the process, Adam came across a small feature then - an identity resolution software in the email marketing space.
They launched the feature within their previous company before spinning it out to scale after like 18 months later.
The Launch (from 0 to $1m ARR)
A couple of years ago, Adam hopped on a call with Nathan Latka - at the time they were doing $4m ARR with a 50% profit margin.
In the call, Retention .com was then called GetEmails. Adam shared the journey to hitting $4m in revenue, but first, we have to go back to the launch before getting here.
The FB ads Playbook
During the pandemic, the rise of TiTok was gaining momentum. Adam has partner Helen decided to shoot some short clips and run them as ads.
Adam describes the process in this form.
Every week they would shoot a funny and witty video clip with Helen and then run it as an FB ad for that week.
As of this writing, am have yet to come across an example clip to share with you. However, here is a screenshot from Adam’s presentation on SaaSOpen.
They ran such ads for 6 months until Adam decided to hang his acting shoes and let Helen do it for a couple of months before stopping altogether.
The outcomes of these experiments were both good and bad;
1/ Added $50k in revenue in 6 weeks.
2/ Get brand awareness as ‘Helen get emails’ became a branded keyword
3/ The returns on Ads spent (ROAS) yielded within a day
4/ The churn rate was super high ( 20%)
Notably, Adam mentions the essence of the clips was to cut through the noise, and grab attention. It worked like a charm for a while but the counterintuitive issue was high churn.
The Learn Cold Email
In several podcast interviews, Adam has emphasized the impact cold email has had on their success.
From the start-up to now, cold emailing remains pivotal to Retention .com’s acquisition channel.
On hitting $1m ARR, the cold emailing team comprised two people - one Sales Rep and an assistant.
In the same conversation with Nathan, Adam mentioned the two sales teams had added $50k MMR in the previous 30 days.
Notably, the cold email scaled them to $12m ARR as per the conversation what Peep Laja on the How To Win podcast