AppSumo is a daily deals website for software targetted at entrepreneurs. It deals primarily with digitally distributed products and online services. It partners with companies who make great online products: niche tools & online learning content, and promotes them through various online channels. AppSumo’s primary mode of marketing is Email Marketing to its customer base of 730000+ Email Subscribers. It has aggregated its email mailing list through multiple Digital Marketing channels since its inception in 2010.
AppSumo was founded by Noah Kagan, who is what we would call a “Growth Hacker”. He is a serial web entrepreneur who rapidly experiments with various marketing strategies to improve his businesses. He has previously worked at Intel, was employee no.30 at Facebook ( and was fired from it), and did marketing for Mint.com. He is also the Founder of SumoMe: a suite of free online tools which can be used to grow the user’s website traffic and Author at okdork.com: his personal blog in which he got 50,000 subscribers in 8 months!
AppSumo’s Business Objectives:
The primary target customers for AppSumo are ‘Entrepreneurs’ and ‘Wantrepreneurs’ (those who want to be entrepreneurs). With this customer base in mind, the business objectives of AppSumo are as follows:
1. Help Entrepreneurs Discover the ‘Best Tools’ for their Businesses at the ‘Best Prices’:
There is a high demand among Entrepreneurs and Wantrepreneurs for Digitally distributed goods like Tools, Software and Apps which help in setting up/improving their businesses. They look for cheaper yet functionally comparable software to their expensive well-known counterparts. Also, Entrepreneurs are on the look-out for Education Materials like Ebooks, Tutorials, Online Courses and HowTo utilize software/tools effectively. AppSumo aims to fulfill this need by providing entrepreneurs with products which will help them ‘start, grow, optimize, and scale‘ their business in the form of daily deals. It also helps them discover products that they did not even know that they needed to excel at their business or to just make their professional life easier.
2. Help Software Developers/Web Entrepreneurs/Online E-learning Courses/App Developers acquire relevant customers:
Finding great products to promote is at the core of the AppSumo’s business objectives. Great products with effective marketing result in a win-win situation for everyone involved. Once AppSumo finds such a product, it promotes it to its targetted customer base in the form of amazing irresistible deals. The product developers are benefitted by achieving large-scale distribution, visibility in otherwise unknown markets and lifelong satisfied customers.
3. Continually Increase AppSumo’s ‘Email Subscribers’ List:
As Noah Kagan points out in his webinar “How to Get 50k Email Subscribers in a Year” (which you should definitely see later if you are looking for actionable steps to increase your list of email subscribers), as “The Zuckerberg Principle” it is beneficial for companies to “Focus on 1 specific goal at a time“.
The single focus point for AppSumo’s Marketing is the increase in the number of “Email Subscribers” or Subscribers to their Newsletters. Through Email, they can reach out to their loyal customers instead of searching for new customers each time & every time that they want to promote a new product. The company also aims to improve the quality of the “Email Subscribers” i.e more subscribers from the relevant targetted customer group.
Approach/Strategy adopted by AppSumo:
Every company is unique. It differs in terms of the nature of business, business objectives and target customers, hence what works for one company may not work for another, sometimes even in the same business space. AppSumo has tried out multiple marketing strategies; some of which have worked spectacularly, while some of them not so much. Here is a look at some of the best examples of the Marketing initiatives taken up by AppSumo in its journey till now, along with the results.
Digital Marketing Strategies that worked:
1. Email Marketing through Newsletters
Email Marketing is the primary mode of marketing for AppSumo. According to Noah Kagan, 90% of their business is due to email marketing, that’s huge! Here is how they do it:
The Ah-ha moment when AppSumo realized Email is Key to their business:
AppSumo initially started with promoting their products through deals on their website in 2010. They advertised through ads on relevant websites including Reddit, Facebook, Google and product related websites and blogs. As they started selling their products, they realized that if they collected their customer’s email addresses, they did not have to advertise from scratch each time they promoted new products. By retargeting these customers through their newsletters, they started generating greater profits. Hence started their quest for email addresses.
Building the Email Subscribers List:
AppSumo yearly, monthly, and hence daily goals use the increase in its email subscribers as the main metric. They have used these top 3 methods increase their Email subscribers:
- Facebook Advertising
- Optimization of Landing Pages to increase sign ups
The Right Frequency of Emails:
They started off with 1 email every week .i.e a weekly newsletter promoting their products. In due course, they found out that people did not mind if they sent them an email every day. With daily emails, they not only increased their frequency of visibility, but also their ROI.
Copywriting is Key:
Though the products AppSumo sells, appeals to its targetted customer base of entrepreneurs and geeks, receiving promotional emails day-on-day is just plain tedious. AppSumo manages to circumvent this problem through the power of Copywriting. Emails are written in a conversational tone, like how a friend would email you. All their emails are structured with the following key elements:
- Catchy Subject Lines that propels the subscribers to open the email. Here are some examples from August 2016
- Validation of the Product Creator:
“Yeah, Corey Rabazinski, the Calvin Klein model turned Marketing Director at Code School (which was acquired in 2015 for $36M).”
“10 years ago, Shaun Neff launched a clothing line. A few years later Snoop Dogg was wearing his hats and endorsing his product.”
- Social Proof:
- Great deals presented in the form of an “Offer you cannot refuse”
- Multiple Call-to-Action throughout the mail: The emails contain multiple call-to-actions including links to the deals page in their website and also buttons to share on Social Media platforms like Facebook and Twitter.
AppSumo started doing Giveaways to meet their main objective of increasing the number of Email Subscribers to their newsletters. It is stated by the company that Giveaways are its “#1 cost-effective method” they have used to gain their 700000+ email subscribers.
How a giveaway is done:
- The Giveaway is created along with a countdown timer and spread through already existing email subscribers, tweets and through facebook.
- Once a person enters the giveaway, they are incentivized to share it with their groups on different social media platforms.
- It spreads virally to reward AppSumo with a number of new email subscribers.
The Dropbox Giveaway is the first giveaway that AppSumo did and also one of their most successful giveaways. It got AppSumo 200,000 new Email Subscribers at the cost of a merger $0.30 per email address. This helped them realize the power of giveaways as a great way to get new email subscribers.
AppSumo has conducted 25+ giveaways, many of which have been successful and some of them not so much. Here are some statistics straight from Noah Kagan himself about the giveaways AppSumo has done in 4 years.
Another good byproduct of giveaways is the increase in the number of twitter followers of AppSumo.
3. Paid Advertising:
AppSumo has spent over $2 Million on Paid Advertising to grow their business, especially on Facebook Ads. And Why do they do Paid Advertising? This is because it is Scalable, Repeatable, Predictable. Also, since Noah Kagan worked at Facebook before, it is possible he knows a thing or two about advertising on Facebook. Their Facebook ad for their in-house product the “The monthly 1K” course is a stellar example of Digital Ads best practices: Good Copywriting with a Simple yet Catchy Image linked to a Consistent Landing Page.
THE Monthly 1K ad on Facebook:
The Landing Page:
Strategies that did not work:
1. Google Ads:
Advertising on Google does work for many businesses, but it was not so in the case of AppSumo. They made back only $25,000 of the $100,000 that was spent on Google Ads. Hence, this was definitely one form of advertising that did not work for them.
AppSumo does not do any Search Engine Optimization or SEO in the form of blogs or useful information. Focus on SEO just did not have the expected ROI for their type of business i.e the daily deals for professionals.
Results Achieved by AppSumo:
- 7-figure business
- $1 million revenue in its first year
- Email Subscribers: 730,000+
- Twitter Followers: 110,000+
- Facebook Fans: 80,000+
Here are the Top 5 learnings from AppSumo’s digital marketing strategies:
1. Email is a truly powerful marketing tool:
AppSumo is a 7-figure business, and 90% of its business is from Email Marketing. Need I say more?
2. Giveaways of relevant products are the most cost-effective way to grow your Email Subscribers list
AppSumo has grown in Email Subscribers list by 500000+ email subscribers through its 25+ giveaways. The ROI is greater when the freebies are products your target customers are interested in.
3. Copywriting is important
Copywriting is key for all types of marketing, including email marketing, facebook, and google ads. Engaging Titles, Simple Content, and Social Proof are important.
4. Do more of “What is working”
In the case of AppSumo, Email Marketing, Giveaways and Paid Advertising gave the maximum ROI. Hence their marketing strategies revolve around them.
5. One Point Of Focus of Marketing
AppSumo’s success has been achieved using this as its single point of focus “Growth In Its Email Subscibers”
Image Credits: AppSumo.com