How do you compete with one of the biggest names in your industry—and with a brand new product?
Three years ago, we launched Chanty, a SaaS application for team chat. This was nothing new. Thousands of apps are born and die each year. There was one difference—we were going against Slack, the giant that is the SaaS role model. Call it bold or stupid, but we had our work cut out for us.
Three years later, we’ve faced a series of challenges. We solved some of them. We’re still struggling with others. Here’s that story.
Why compete with Slack?
When we first thought about launching a SaaS in the team chat space, we had a major decision to make. We could either grab a slice of the established market or carve out a new one (e.g., a team chat app for accounting companies).
A couple of factors influenced our decision:
- We wanted to stay bootstrapped.
We didn’t want to be guided by someone else. We had that luxury—we had three other profitable companies (focused on web design and development) when we decided to launch Chanty. Chanty was, at its outset, a fun side project.
- We wanted to spend money on product development, not market research.
Because the idea of a team chat app was already validated, we had our target market right in front of us. We had a major competitor, too, but Slack had already done some of the heavy lifting by popularizing the idea of a team chat app.
Identifying a new market could have taken months and lots of cash. Instead, we saved most of that money for product development. We did do some research, primarily among our clients and some colleagues in the SaaS world. But our main guideline was to create something that worked well for us.
We had used Slack—and lots of other messaging apps—but they were either too complicated, lacked audio and video calls, or forced us to upgrade immediately. We also wanted a built-in, easy-to-use project management functionality.
Still, to make it in such a competitive field, we had to stand out. Even before we started, we constantly got asked the same question: “How is your product any different from Slack?”
Differentiating our product
In the early days of the app, we asked a few questions during sign-up. Primarily, we wanted to know if a user had switched from another team chat app and, if so, why they switched to Chanty. This gave us a plethora of good ideas.
We also found out why people switched from Slack, which became the first of two ways we sought to differentiate our product.
1. We solved a primary pain point for Slack users.
The first way we positioned ourselves was to go after the biggest pain point for existing Slack users—that 10,000 message limit in Slack’s free plan. We decided to have an unlimited message history in our free plan, which became a main reason why people switched.
That hasn’t been the main reason why new people sign up for our app, but it’s been the primary way that we’ve “stolen” Slack users. Offering unlimited messages in the free plan got immediate results, and it was one of the main reasons that we got our first 100 users within a few days of our launch.
We realized that these Slack users weren’t likely to convert to paid users right away—our free plan solved their primary pain point. Some, of course, figured out that an unlimited message history means that they can continue using Chanty for free forever. We have a number of teams like this, but they’re the minority.
So how could we get the rest to upgrade?
We tried providing audio and video calls (and other features) in the paid version only. But almost no one upgraded to a paid plan because of features, which were nice-to-haves, not necessities. Our app usage data showed that most people used the chat function only—and that a good chunk of teams had more than 50 users.
We realized that the only way to incentivize an upgrade from the freemium plan—without undermining our “unlimited messages” differentiator—was a cap on the number of users. This fit with our app’s adoption: A smaller team would sign up and decide whether it was worth upgrading for the entire company.
We settled on a limit of 10 users for our free plan, which has become the primary way we move people from freemium to paid users.
2. We were the affordable option.
The second way we positioned ourselves was with price. Many SaaS applications charge customers based on the number of seats, which isn’t that much for a landing page tool (often just a single user). But the costs for that model scale quickly for team communication apps—they work only if everyone’s involved.
So, if you have 300 employees, the difference between $7 per user per month and $3 per user per month means spending $2,100 per month instead of $900 (or more than $13,000 per year).
Our research found that it’s mostly new users who are attracted to the price (i.e. those who have never used a team chat app before). Users from Slack (and other apps) rarely switch to our app because of the smaller price tag.
So, we decided to have the most affordable plan out there, at $3 per user per month. The low price point became the way for us to differentiate our product for new users who were less willing to make a financial commitment on a new system of communication.
Going after new-to-chat users also meant that we needed to be extremely user-friendly. For novice users, Slack (and other team chat apps) can be intimidating. We made our sign-up process and onboarding as simple as possible—you can get an account with an email, invite colleagues by adding their emails, and do just about anything in a couple of clicks.
Our positioning split our user base almost evenly between people who came from competitor apps and those who had never used a team chat app. That’s added a challenge: Our marketing—and product development—have had to address both target markets.
Creating and scaling a marketing plan
Our existing web design and development agencies had gotten most of our clients through word of mouth. When it came time to market our SaaS product, we had zero knowledge of other channels.
Getting through the first couple of months was really difficult—we were mostly developers and designers.
The first (and failed) attempt
We started with some clumsy PR—badgering our clients to mention us in their content in exchange for some free work on their websites. Needless to say, those efforts sucked. Plenty of clients ignored us.
As we considered other options, we ran into roadblocks:
- We didn’t have a big budget to snag Slack’s customers through paid advertising.
- Email marketing wasn’t an option since we didn’t have a big mailing list.
SEO and organic acquisition became the logical choice.
A simple organic strategy, with a twist
Our strategy was straightforward:
- Use content to get readers.
- Turn readers into app sign-ups.
There was one wrinkle: We wanted people to convert directly from reading our content instead of capturing their emails and showering them with drip campaigns until they converted. We didn’t want to be known as a pushy, annoying brand—we wanted motivated users, not reluctant ones.
That desire influenced our content (beyond the standard inbound marketing mantra of “be helpful”). We knew we’d need to go more bottom-of-funnel with our keyword research.
We wrote a lot of articles comparing team chat apps (Slack, Flock, Fleep, Microsoft Teams). We used each tool before we wrote about it and, in our reviews, highlighted strong and weak points.
Because we had no stake in, say, whether Slack was better than Flock, we published some of the most unbiased app reviews in the category. (There was an added benefit: We got to do competitor research at the same time.)
The decision to target branded competitor keywords hasn’t changed to this day. Organic traffic is our top source of new leads and customers, and the primary reason why Chanty has 10,000 active users today.
That said, getting new users via organic traffic took quite a while to pay off; it was at least six months before we started seeing results. But those results have been the primary catalyst of user growth.
The most valuable topic we’ve hit on so far? “Slack alternative.” It has thousands of monthly searches and high intent. We’ve doubled down on posts like these:
- Skype alternatives;
- Discord vs Slack;
- Slack competitors;
- Microsoft Teams vs Slack.
We also found a way to make our content more competitive in search: Guest blogging to build links to articles with the highest potential for conversion.
Guest posts to make content more competitive
In the beginning, we had abysmal results with outreach. Sending out emails en masse and just changing the recipient name and company didn’t work. Once we decided to write personalized emails one by one, we got drastically better results.
Over time, we perfected our pitch, which helped us graduate from getting posts on good blogs to great ones. (At one point, we realized that we had done more than 100 guest posts in a single year.) We ended up getting featured on sites like Hubspot, Entrepreneur, Marketo, and many others.
A few guidelines that worked for us:
- We reached out only to blogs that covered topics closely related to our product: SaaS, marketing, productivity, team communication, etc.
- The blogs we reached out to had to have a Domain Authority (DA) of at least 40. As our own DA increased, we upped the lower limit.
- We checked the website’s traffic before we sent a pitch. A website with a big DA and little to no traffic smells like a link-building scheme.
We did all of this with two people. One was an outreach and link-building manager, whose job was to build a database of relevant blogs and get in touch with their editors.
The second was a dedicated writer who had a firm grasp on a variety of topics. (If we had scaled this approach, we would’ve needed to hire another writer first. We always had more pitches accepted than we could complete.)
Sometimes—as happens to everyone—our guest posts got rejected. It was rarely because the article was flat-out bad; the editors just didn’t like it for one reason or another. In almost every case, we got the article published on another blog with minor changes.
(One note: If you tell the target website’s editor that you already have a finished article, they’ll see right through it.)
Scaling the model
Guest posts also opened the door to expand an initial partnership. For example, with each new guest post, we had an opportunity to cite past partners’ content.
We asked those partner CMOs and content heads if they would include us in their upcoming articles—and let them know that we would do the same. As a result, we multiplied our efforts, just by reaching out to a few partners.
The risk of relying on a single channel
More recently, we’ve again tested other tactics, such as paid ads, but the ROI hasn’t been nearly as good. That’s a liability. When SEO is a major part of your lead generation strategy, one algorithm update can undo years of work.
An algorithm update that rolled out at the beginning of November 2019 cost us 20% of our overall traffic—including a drop in rankings for a few really important pages.
We’ve also tried to diversify our efforts with our Facebook group. We stay in touch with current and potential customers and answer their questions. We also use it to encourage discussion about team communication, to announce new features and releases, and, in the end, to have some fun.
The Facebook group currently has a little over 600 members. We send out the link to the Facebook group as part of our onboarding email sequence, so it’s comprised primarily of active users. Creating the group was fairly easy, but keeping it active takes a few hours every month.
Finally, we’ve added a simple pop-up for visitors to join our newsletter and, over time, created a series of ebooks, each with its own opt-in form.
That’s helped us go after new users.
A new challenge: going after a niche that isn’t looking for us
Publishing product comparisons has worked well to attract users already looking for an app. But we also wanted to attract and convert those who had never considered a team chat app—small businesses, organizations, non-profits, etc.
We needed to convince them to give team chat apps a try—and to use Chanty first. This generally was easier than taking Slack’s customers.
This gave us a two-tiered content marketing strategy:
- Articles to convert people actively looking for an alternative to something they’re using.
- Content to appeal to people who were problem- but not solution-aware.
To capture the attention of the second tier, we write about the importance of communication, collaboration, work-life balance, productivity, and similar topics.
These pieces have helped shape the Chanty blog into what it is today.
Our journey is now three years in the making. We recently reached 10,000 active customers, but it feels like we started just yesterday.
While there are still major breakthroughs to make, getting 10,000 people to choose us in a market heavily dominated by one company already feels like a major victory.