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Picking your Lifecycle Marketing Software
How to pick and manage your LMS platform from early-stage to IPO
Every seasoned growth marketer knows how critical the role of lifecycle marketing can be in driving growth. The reason is pretty simple — lifecycle marketing is one of the key levers outside of the product experience that marketers can pull to drive retention, lower churn, and scale revenue. Seasoned marketers know that retention is not just the primary driver of growth, but also the ultimate growth strategy.
Whereas the community is mostly aligned on the importance of lifecycle marketing, things might get hairier when it comes to execution. From our own experience owning lifecycle marketing at several early-stage startups but also at scale-ups such as Opendoor and MasterClass, we’ve learned most teams fail to realize that a successful lifecycle must align engineering and marketing. To properly execute lifecycle marketing, you don’t just need a full-fledged plan, you also need the right tooling, data, and fit within the broader software architecture to bring it to life.
Why would we focus on such a niche topic?
Our advisory experience shows many startups under index on making the right Lifecycle Marketing Software (LMS) investment, and that has a serious impact, even on your path to PMF and early scale.
User experience. Emails, push, and retargeting define most of your out-of-product experience, actively building your habit loops. Failing to select a platform that effectively delivers on that means failing to build half of the retention you need to reach PMF.
Financial investment and lock-in. Most sophisticated LMS platforms are sizable investments starting from $10-15,000/year for enterprise-grade solutions, mostly priced around the number of customer contacts you can store within them. If you lock yourself into the wrong platform or make too big of an investment, you might regret it. This is especially hard as you’ll need to estimate how much, and how fast, your contact list is going to grow; but also when you’re migrating across LMS platforms there is lots of customer and performance campaign data that is hard to migrate and you can’t just replay post-migration. All of this adds to the financial investment and trade-off.
Technical dependencies. When approaching lifecycle marketing, you think you just need to send your customers some emails. In reality, LMS implementations eventually include a nontrivial technical component. We recommend thinking through key lifecycle marketing use cases and doing a proof-of-concept implementation as part of vendor evaluation. At a minimum, this will ensure that your core retargeting campaigns will be fully supported by your vendor. At Opendoor we nearly canceled our LMS platform after discovering particular promised features were underbaked and ensured we had adequate workarounds before proceeding.
In this post, we’ll guide you through HyperGrowth Partners' very own framework to select, implement, and manage your Lifecycle Marketing SaaS Platform, as this is one of those investments you don’t want to regret.
1. Defining the core lifecycle marketing use cases
To pick the right LMS we need to first define what a successful lifecycle marketing operation is supposed to do. In concrete, lifecycle marketing should trigger this set of campaigns.
Each campaign consists of a sequence of one or more emails and push notifications that aim at getting users back into the product on a recurring basis. How to structure these campaigns in detail might be a story for another day, however, the table below might provide some food for thought.
At Opendoor, one of our key campaigns was the abandoned cart to keep users up to date on the value of their houses, which we'd send every week. To make that happen, we had to tailor it based on who got which email when and pipe the pricing data into the email pulled from our DB.
Or take our MasterClass weekly recommendations email, where we suggest what other courses you may want to check out, based on event requirements tailored based on an internal data science model.
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2. Dissecting the LMS core capabilities
Once you have an overview of your lifecycle marketing campaigns, it’s essential to define the core use cases of an LMS — what it does and when to use it. For the purpose of this exercise, we’ll distinguish between:
Table stakes features. Basic, indispensable capabilities are required to carry out a successful lifecycle marketing operation. These entail:
Design & messaging. Writing, designing, hosting, sending, and tracking messages — across at least 1-2 channels across email, push notifications, and SMS — depending on your business.
Automated workflows. Create automated messaging sequences, depending on the actions and behaviors that you want to encourage throughout the lifecycle (eg. activation, engagement, retention).
Advanced features. Capabilities that can sensibly enhance not just the user experience, but also the robustness of the backend and the effectiveness of your marketing team. These include things like:
Advanced segmentation. A more sophisticated messaging journey builder that lets you target users based on advanced customer event triggers, including things like event frequency, advanced delays, and channel filtering. For example: “Send this only to people who started checkout twice, on two different days, from two different channels”.
Advanced design templates. Think reusable email template components like headers, footers, etc. to reduce custom design iterations and streamline UI consistency across your journeys.
Sophisticated A/B testing. Not just for testing subject lines or email copy, but entire journeys in a way that optimizes for true business metrics such as average basket value or revenue.
Data and tooling integrations. Connecting arbitrary API endpoints in the middle of specific journeys to capture event data and feed them, for example, into Meta Ads retargeting audiences.
Data governance. Tooling that allows you to see which data fields are used in which journeys and mark certain events or user traits as deprecated, increasing the efficacy and reliance of the autocomplete process.
Permissions & approvals. Enterprise-grade granular permissions to manage team access and GitHub-like review workflow to approve changes before they get deployed.
Cross-channel support. Broader messaging capabilities across additional channels where you can re-engage your customers, such as in-app modals, Slack, or other OTT platforms (eg. WhatsApp, Telegram, Messenger, etc.), direct mail, etc.
Working back from your requirements is key to making the appropriate investment. Again, the below list might not be exhaustive, but we’ve found this to define the lay of the land. Also, one thing to notice is that:
As market competition increases in both pace and intensity, the pressure to deliver an above-average lifecycle marketing experience is high, pushing advanced features to table stakes quicker.
3. Picking the right LMS based on your company stage
Pre-seed stage — code + email delivery vendors
In the early stages of your organization, the attention is normally on building an MVP and getting initial customers; email is on nobody’s radar when you have a product to build. However, as we’ve seen above, some emails and pushes are part of the core user experience even at the MVP stage!
Because these emails must be sent, the scrappiest (quick, easy, and convenient) solution might be to have your emails triggered directly from your back end through some minimal engineering work that connects directly to your software architecture. In our experience, Django, Rails, or Node all do a perfectly reasonable job of creating and hosting HTML email templates directly in your code base. You could then connect your templates to a simple email-sending service like Postmark (our favorite!), Twilio’s Sendgrid (also great!), Mailgun, or AWS’ Simple Email Service.
This option should give you baseline capabilities such as email firing and basic and domain health reporting; however, everything that relates to subscriber list segmentation and email sequencing, as well as any email template design update, will need to be executed through engineering work, which could also slow initial product marketing efforts down.
Seed stage — lean LMS platforms
As you start releasing your product for beta, email becomes one of your first channels to activate and nurture your waiting list.
Building a relationship with your early customers is key, and email will be your primary channel for that — ensure you don’t get bogged down by technical dependencies!
When the need of product (marketing) teams to repeatedly iterate on email template design or start more articulated email sequencing, you know it’s time to move on to the next phase.
At this stage, we recommend signing up for a proper LMS platform, which is ultimately the go-to solution for ensuring flexibility in design and marketing, as well as pace of execution. Keep deferring to manual engineering work, or even teaching a non-technical person to do the manual job, are typically net negative resource allocations.
Before we dive into the details, a clarification on the category naming and its use case.
LMSs are not CRMs. As outlined above, these SaaS include email list segmentation and subscriber management capabilities, but that doesn’t make them CRMs. CRMs like Salesforce, Hubspo, or Attio are platforms geared for B2B, high-touch customers, which provide much more tailored comms capabilities compared to LMS which are more designed for automated, one-to-many messaging.
LMSs are not for outbound. Also, LMS heavily differs from outbound email outreach SaaS like Apollo, reply.io, or SalesLoft, which are usually used by B2B sales and revenue teams to scrape and generate business leads and pipelines. On the contrary, the LMS job starts when the customer is already in the ‘customer’ lifecycle, which usually starts post-signup.
Our favorite vendors include customer.io (our top choice by far!), Drip, and Ortto, as well as newcomers such as Loops or Dittofeed. These solutions are usually priced more flexibly with monthly plans starting in the region of $100/mo — their pricing model works by the number of customer contacts with a threshold starting at 5,000 contacts; hence affordable up to series A.
Implementing these solutions requires a little bit more thinking, but it’s important to start small, keep it lean, and don’t over-engineer it. The key things to focus on are:
Track customer events. Ensure you track all critical customer lifecycle conversion events (eg. what customers do in your product) through your Customer Data Platform (CDP) like Segment — they include `Signup Started`, `Account Created`, `Feature Used`, `Checkout Started`, or `Purchase Completed`, etc. Again, don’t over-engineer your events — ensure your event tracking plan is as lean as possible especially if you’re just starting out. You might already be tracking these through your product analytics tool like Amplitude or June; if so, they should appear on your LMS as soon as you connect it with your CDP.
Be mindful to send your customer events server-side, otherwise, your lifecycle emails might get blocked by AdBlockers, which you definitely want to avoid!
Build user profiles. Sending the right emails doesn’t just require knowing about what customers do with your product, but also who they are. Don’t forget to capture critical customer dimensions like:
Full name. Include a function that helps you split first and last names so you can address customers just with their first name (we’re not in the 1800s anymore!).
Email preferences. Another must-have is to ensure you get consent for sending marketing emails and allow them to manage the related preferences on a dedicated page of your LMS (all of the above should provide an out-of-the-box one).
Created at. The timestamp of when the customer profile was first seen in the product (eg. signup date).
Key demographics. If you’re in B2C, you might want to capture and store traits like gender, age group, income bracket, etc.
Key firmographics. If you’re in B2B, you might be more interested in capturing their job title, department, seniority level, or company-related information like industry, number of employees, revenue, etc.
The goal is to create a single user profile serializer — a JSON code that captures and stores interesting customer traits that can be used for segmentation and targeting purposes.
Bulk update your LMS user profiles. Once you have your profile done, you can run a bulk update of your LMS user profiles, especially when:
Users perform critical events like creating an account or making a purchase — hardcode these critical events in the user profile as properties
Or every night, for all users in bulk. This alternative is easier than the above, and you can eventually move it to your data warehouse.
Keep transactional emails in your codebase. You might get tempted to also move transactional, product-related emails (eg. password reset, receipts, etc.) to your LMS. At this stage, we recommend to keep them separate. Because these are critical UX elements that require fewer updates and/or iteration, it’s important to retain control over them and avoid migration efforts.
Need help crafting the best lifecycle marketing strategy and implementing the right LMS platform accordingly?
Growth stage — enterprise-grade LMS
Eventually, you’ll run into the limitations of your first system. Typically, this will feel like dealing with:
The kitchen sync. Your LMS will become clogged with duplicate and redundant user events and traits, creating confusion, and dependencies, and slowing things down. Marketers won’t know which fields to trust, which turns into buggy emails like “Hello f_name” being sent.
Too many cooks. Another common issue is having too many cooks in the kitchen, where everyone has access to emails and related code. Email template breaks, messaging, and design guidelines aren’t followed, and lines get crossed. Startup life, hey!
Very sophisticated recipes. Your marketing team starts asking things like: “Let’s send a maximum of one email per day based on their time zone, prioritizing campaigns based on custom user traits,” or “Let’s include tailored product recommendations in our emails that are based on previous purchase history”, or even better “Let’s trigger this resurrection email with a custom incentive that is fired based on the data science team’s churn model”.
When requirements like this start landing on your table, you know you’ve graduated to the big leagues, which is spoiled for options; we love the most modern solutions like Iterable, Braze, and Klaviyo (for e-commerce companies), but there’s also a handful of more legacy providers that do an enterprise-grade job like Market, Pardot, Salesforce Marketing Cloud, and obviously Hubspot Marketing Hub.
Some of our recommendations that no SDR of these companies will ever tell you when pitching your products are:
Ensure you’ve hired a Head of Lifecycle Marketing. At this stage, lifecycle marketing becomes a team with a capital T — a structured organization with 3+ people who need proper tooling to get their job done.
Minimize LMS access. Remove access to the LMS SaaS for everybody except for the lifecycle marketing team members. Until things are more organized, everything is going through them.
Plan for the migration. When graduating for a better and bigger LMS, you need to factor in a migration process — involving user profiles, design templates, campaign workflows, related data, and everything in between — and ensure that data, engineering, and design support will be provided in the transition.
Implementing or migrating to this type of LMS is no easy fit. As mentioned before, it’s a cross-functional effort that can require up to a quarter.
Upgrading to an enterprise-grade LMS will require you to clean up the events data kitchen sink. Because this cleanup work is hardly prioritized, you’ll need to be able to point to previous incidents and related negative effects on the business (eg. churn). This might require you to introduce data governance tooling like Segment Protocols or Avo that will enable you to enforce pre-agreed events and properties data schemas and proactively trash events outside of it. Specifically:
Customer events. Start proactively filtering the ones that explicitly go to your LMS
Upgrading to these systems is not just a good excuse to reorganize your data strategy, but also to migrate your lifecycle marketing assets email-by-email and workflow-by-workflow. These migrations are often a fraught and risky process that many companies avoid especially if their existing tool is enterprise-friendly.
Remember, the core of your out-of-product experience depends on this migration. And at this stage, the stakes are 10x higher than at pre-seed — don’t make it an afterthought.
Late stage — open core / open source
Congratulations! If you’re reading this paragraph, you might be a decacorn! Are you someone from Uber, Airbnb, Doordash, or Pinterest? Eventually, you’ll run into a degree of workflow customization that even enterprise-grade LMS can’t natively support. And even if you’re a decacorn, you can’t get them to build it for you!
At this stage, when companies typically get to 500+ engineers, more and more capabilities start being brought back in-house to cater to a more advanced degree of security, scale, and personalization, so they more cleanly fit within the broader software architecture made of analytics, experimentation, compliance, etc.
In this context, you might have an even more structured lifecycle marketing organization, with very specific requirements that span well beyond data-driven journey personalization and touch upon content and messaging localization and transcreation, with incentives and sequences that are highly aligned to the multiple regions you operate in.
Depending on these tailored requirements, what most lifecycle marketing organizations do is rebuild specific modules of LMS capabilities as custom in-house software, even with the dedicated support of an internal Marketing Tools Engineering team.
Some focus areas to keep in mind here are to align your cross-regional and -cultural lifecycle marketing organization to deeply understand which capabilities need to be customized and rebuilt in-house, and which ones can stay off-the-shelf on the current LMS.
In 2023, some companies have been pursuing an open core/open source strategy, building LMS platforms that can be forked into both hosted modules of capabilities and some others that are fully hosted and outsourced. This is still a recent development, but we believe it’s a great starting point for a future where LMS software becomes less proprietary and easier to iterate on based on specific company requirements.
If you want to avoid making costly mistakes on lifecycle marketing and ensure you have stable retention, we can help you implement your LMS platform end-to-end!
Selecting a Lifecycle Marketing SaaS should be a thoughtful process, echoing the company’s stage, needs, and goals. Starting with foundational platforms and moving through to more advanced systems as the company evolves, enables sustainable growth and efficiency.
Whether the company is at pre-seed, growth- or late-stage, the essence is to align with the company’s requirements and structure and grow from there. The right LMS acts as a catalyst for habit-building, retention, and growth, so don’t under-index its impact, but neither its implementation nuances and dependencies.
In a world where we’re overwhelmed with SaaS choices, it’s not about having a myriad of features but about having the right ones, aligned with your company’s stage.
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