Renderforest is an all-in-one platform to create videos & graphics for branding with over 8 million users globally. With intense competition, Renderforest’s CEO, Narek Safaryan developed a bottom-up growth strategy priced to each user’s needs, creating a standout user experience to compete with subscription-only competitors.
Previously, Renderforest moved on from an unreliable ‘piecemeal’ selection of tooling that failed to manage their complex billing logic across the whole customer lifecycle, resulting in failed payments, thousands of customer billing tickets each month, and a high refund rate.
With Paddle’s reseller model and platform, Renderforest was able to unlock its bottom-up growth strategy and set a course for 3X ARR growth:
- Reduced the refund rate by 60% (to rates matching similar software startups), adding tens of thousands of dollars in ARR.
- Run millions of dollars of ARR through Paddle’s platform.
- Saved over 100 hours per month on billing support burden.
- Managing the lifecycle of over 8 million users.
- Saved over $7,000 per month in hidden foreign exchange fees from its previous payment provider.
Designing a bottom-up growth strategy
Renderforest is an all-in-one branding platform, used by over 8 million users globally and over 300,000 new users signing up each month. With Renderforest, anyone can easily create branding and design assets like logos, websites, animations, and videos.
With intense competition from other design and video software and service vendors, CEO Narek Safaryan needed a strategy to grow from a startup to a scale-up software business following their $8 million funding round in early 2018.
Pricing was the core component of their growth strategy.
Most of their competition depended primarily on performance marketing to drive new user acquisition. Renderforest chose to maximize user acquisition through free channels like referrals. CMO, Roman Daneghyan explains:
"The model was part of our marketing strategy from the beginning. We have lots of free users who are just creating videos and sharing them on their social networks and websites - which all have watermarks."
Renderforest’s team researched and understood common use cases they could use to acquire new users. From early on, they identified common, scalable use cases.
"In the beginning, we only created logo animation videos. We realized we could create other templates besides the logo animations. So we added explainer videos to our library. Now we have hundreds of video templates, with templates identified by analyzing the market and surveying our users."
As the Renderforest team added more and more products, they began to observe differences in when and why users signed up.
"Some people look for logo animations or logo videos. They just want to buy one and use them for a long time. No one needs to pay more for a subscription if there is an option to get only one video."
With free watermarked and one-time product purchases, they began to acquire more users faster than its competitors who had subscription-only, pay upfront strategies.
"This pricing is a competitive advantage. For example, someone needs only one video, but competitors charge only for a 10-video subscription."
Subscription revenue was used to maximize value amongst its best user segments who used their platform on an ongoing basis.
"Subscription plans are good for people who want to create a larger amount of videos like marketing agencies or real estate agents. The biggest part of our growth, in the beginning, was the premium package."
Renderforest’s growth strategy depended on combining all these methods of pricing and packaging their product to align with their users needs - maximizing user acquisition with a freemium strategy, whilst maximizing revenue with a subscription model.
"We are working to increase one-time purchases, we are working to increase free users, and we are working to increase the number of subscribed members. We are working all these angles to increase the popularity and the awareness of the brand, ultimately increasing revenue."
With a freemium pricing strategy driving global user acquisition and growing revenues through subscriptions and upsell, Renderforest plans to triple year-on-year revenue by the end of 2019 to $6 million.