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The success story of Klaviyo, the product, has everything to do with data. But the success story of Klaviyo, the brand, has everything to do with, well, brand.
The marketing automation company’s name is now synonymous with their promise — giving companies ownership over their customer data to unlock growth with personalized marketing.
Klaviyo has broken through the ranks of the hyper-competitive MarTech space and has unlocked some incredibly impressive accolades in the process:
- Nearly $700 million in revenue in 2023 on the back of 20% YoY growth
- Over 143,000 customers and thousands of agency, tech, and platform partners
- Breaking a nearly 2-year SaaS IPO slump by going public in September 2023
Today, we’ll look at how Klaviyo has leveraged their brand and partnership network to reach the peak of the mountain in the marketing automation space.
How Klaviyo is Transforming the Incredibly Crowded Marketing Automation Space
Part of the reason why Klaviyo has surpassed many established and startup marketing automation platforms — especially those focusing on owned channels like email and SMS — is that they started as something else.
Founders Andrew Bialecki and Ed Hallen first created a database for ecommerce and retail businesses that needed help making sense of their massive stores of customer information in real time.
As more customers hopped aboard, they started getting questions about creating better integrations for platforms like MailChimp, ConstantContact, and Salesforce ExactTarget.
Instead, they decided to build that functionality on top of their database and Klaviyo entered the market automation sweepstakes with a keen eye on the ecommerce space.
Over a dozen years later, Klaviyo has jumped the queue of over 400 marketing automation platforms to become a leading contender.
The Klaviyo team is adamant that their foundation as a database is what sets them apart from the rest. It’s their key differentiator and something built into the fabric of their brand, at least on the internal side.
According to Hallen, “If Klaviyo started today, we would take the same path. We would build our own custom data storage and processing environment. While it may not be immediately visible to the outside world, these capabilities are a key part of our differentiation.”
But Klaviyo’s approach as a hybrid customer data platform (CDP)/ no-code marketing automation tool isn’t secret anymore. Nor is it unique. Companies like Omnisend, Sendlane, and others have a similar offering.
What’s so different about Klaviyo’s strategy that allows them to unlock such growth?
Evaluating Klaviyo’s Growth Engine
The Klaviyo website currently brings in around 5 million visitors every month. The lion’s share of that traffic comes via direct search — 69%, to be exact. That’s around 3.4 million people who are so familiar with the Klaviyo brand that they enter the URL directly into their browser (or have it bookmarked).
The next most popular channel for the company is organic traffic at 16%, followed by paid ads at 5.2%.
It’s not surprising that direct traffic is Klaviyo’s leading traffic channel — word of mouth has been part of the company’s DNA since the early startup days in 2012. They have a similar channel distribution to other product-led companies like Loom, Calendly, and Slack.
Interestingly, word of mouth is still a major part of their growth engine and GTM strategy.
As you can see in the slide below from their FY23 Q4 Earnings Presentation, Klaviyo still relies on their brand notoriety and partnership network to bring in and convert new users in the SMB space. Their thinking: once people use Klaviyo’s email tools and database, they will realize their value and embrace the “automatic upsells” that come with increasing usage.
This “efficient inbound motion” opens up Klaviyo to invest in a more targeted marketing and sales approach to land enterprise customers.
During their most recent earnings call, the Klaviyo team talked about the need to “evolve their brand and narrative” to increase overall awareness.
Let’s dive deeper into the two key elements of this awareness-building strategy — branding and partnerships — before looking at a key area where Klaviyo can improve.
A Powerful Brand Story
To start, let’s be literal for a moment:
What does the word Klaviyo actually mean?
According to the company’s About page, it’s based on the Spanish word “clavija,” which means mountaineering pins. (They’re called pitons in English, but that doesn’t sound nearly as good.)
As for the rationale behind the name, Klaviyo explains how this connection to a simple mountain climbing tool accurately reflects how they impact businesses. Their About Page says, “We liken our customers to mountaineers. Our goal is to support and accelerate their climb to the summit.”
That’s funny because this brand story is also a major part of Klaviyo’s climb to the summit of Mt. Marketing Automation.
It’s easy to overlook the significance of a name, logo, and colour scheme, but these creative decisions actually have a major impact on consumers. Research shows that the conceptual and visual branding of a product impacts everything from recall and emotion to perceptions of quality and purchase behavior.
The American Marketing Association outlines three main qualities of great brand names that are relevant to Klaviyo:
- Strategic — the meaning is relevant and distinct.
- Creative — memorable and emotionally resonant.
- Clear — linguistically viable and easy to say/pronounce.
Klaviyo definitely checks off the first two boxes — it was strategically chosen to promote a specific meaning, and it’s undeniably creative and memorable. Granted, it’s not exactly the easiest to spell (I’ll come back to that in a second).
Remember, nearly 70% of their web traffic comes from people who are familiar with the brand and search it directly.
Of the hundreds of thousands of visitors that reach Klaviyo’s website through organic search, 85% involve branded keywords. The search term Klaviyo is the company’s top organic keyword, generating over 100,000 monthly searches, 83% of which end with a visit to the company website.
Even misspelled versions of the term — Klayvio and Klavio — get nearly 30,000 organic searches every month. And that’s just in the US.
The top keywords for the site (after the brand name and misspellings) follow the same form: “Klaviyo” + a keyword modifier.
This strong branding has been influential in Klaviyo’s rise in the ecommerce space. As the popularity of the product increased and the name started to spread, more and more people associated the name with ecommerce success. Email marketing expert and Klaviyo Platinum Partner Darin Hager summarized this dynamic back in 2021, saying:
“If you’re not using Klaviyo and you’re in e-commerce, then it’s not very professional. If you see ‘Sent by Constant Contact or Mailchimp’ at the bottom of an email by a brand, it makes it look like they’re not really there yet.”
In other words, the platform was so effective that the mere presence of the name Klaviyo signaled success.
One of the ways Klaviyo has been able to do this is by driving the association between their name and marketing revenue attribution. This association is built into every aspect of the Klaviyo experience, from their marketing content to the product itself.
Take the screenshot below from Klaviyo’s conversion performance card. It shows an ecommerce company’s performance towards a specific conversion metric, in this case, placed orders.
Right next to total revenue is another figure showing attributed revenue — the value of conversions that are directly due to Klaviyo marketing — 70% of this revenue is Klaviyo-attributed value.
Marketers love metrics. Probably because we rely on a range of metrics to track the movement of site visitors to converted customers and justify our tactics.
What better way to cement your brand as the go-to platform for data-driven marketing than by creating your own branded metric?
Klaviyo-attributed value (KAV).
Klaviyo-attributed revenue (KAR).
Klavio-attributed conversions (KAC).
These terms show up across a whole range of marketing assets, from investor presentations to support pages and case studies.
The metrics below are from a case study on Jones Road, a beauty brand and notable Klaviyo customer. These stats on the impact Klaviyo made on Jones Road’s Black Friday Cyber Monday (BFCM) campaign last year are the first thing you see after the cover image.
At every turn, Klaviyo is pushing the connection between their name and profitable marketing. They’re working hard to highlight how their platform is a critical tool — a clavija — for ecommerce brands that want to reach the peak of their niche.
The Risk of Going All-In on Brand
A quick aside before we look into partnerships.
Klaviyo’s brand success is undeniable. But it’s important to highlight that there are definitely risks to leaning too heavily on product- and brand-led growth.
For example, there was a lot of pushback when Klaviyo announced a plan to offer professional services surrounding their product. It was widely seen as a move to replace agencies ( a major part of Klaviyo’s growth ecosystem).
Which prompted a lot of posts like this:
I saw the writing on the wall with this one awhile ago.
Klaviyo just rolled out their own agency services.
If it weren’t for agencies, Klaviyo wouldn’t be where they are today.
Now, they’re rolling out their own managed services that’ll essentially compete with all of us… pic.twitter.com/Mda0anaLJ1
— Chase Dimond | Email Marketing Nerd 📧 (@ecomchasedimond) March 4, 2024
And this:
Some thoughts on this Klaviyo agency service stuff:
– The worst aspects of dealing with big agencies, are because you deal with some college grad/marketing degree type – this will be 100x worse
– The bigger the company, the more SOP’d and generic the service will be.
– If you…
— Conor (@conorgallagh) March 5, 2024
While the company seems to have backtracked somewhat on the rollout, the brand damage has already been inflicted. Even if customers and partners get over the misstep, it’s brought more attention to other issues like pricing, customer support, and product updates.
It’s not catastrophic by any means, and the brand can definitely recover. Unfortunately, it’s brought a lot of attention to competitors like Sendlane and Omnisend. Not to mention the alienation of agency partners.
Ecommerce and Agency Partnerships
Klaviyo’s success has also been highly reliant on mutually beneficial relationships. Even the initial decision to build email and SMS functions came from consistent collaboration between the founders and early database users.
One of the most important partners during those early days was Shopify.
In a recent interview, Bialecki covers the extent of this beneficial relationship with the leading ecommerce platform:
- Klaviyo leveraged Shopify’s open API and supportive developer ecosystem, integrating early to access a growing base of ecommerce merchants.
- As Shopify expanded, Klaviyo capitalized on this growth, gaining visibility and establishing itself as an essential tool for ecommerce success.
- Klaviyo thrived from Shopify’s encouragement of third-party apps, which drove merchant adoption of Klaviyo’s services.
- Klaviyo addressed Shopify merchants’ needs for data-driven, personalized email and SMS marketing capabilities.
- Shopify boosted Klaviyo’s brand trust and recognition, making it a preferred choice for Shopify’s extensive merchant network.
- Integration with Shopify provided Klaviyo with valuable merchant feedback so they could iterate and align with ecommerce trends and needs.
Just like Shopify has become the system of record for ecommerce businesses, Klaviyo has become the go-to platform for ecommerce marketing.
Klaviyo has used a similar integration playbook to win customers through platforms like WooCommerce, BigCommerce, and Square (although to lesser success).
The company has doubled, tripled, and quadrupled down on partnerships, with their latest earnings call outlining the three additional prongs of this strategy:
- Developers
- Technology partners
- Marketing agencies and consultants
Between their extensive partnership ecosystem and huge customer base, Klaviyo has built a massive backlink network — over 5.6 million URLs directing traffic from 30,000+ domains. It’s by far the most impressive part of their content marketing efforts.
But, as valuable as it is to have companies like Shopify, Google, Zendesk, and Yotpo as partners, Klaviyo’s investment in agency partnerships has been especially helpful in the last few years. (Which makes it even more strange that they tried to undercut this partner segment.)
Klaviyo’s partnership landing page outlines all of the major benefits that their 5,000+ agency partners get from connecting with Klaviyo.
As much as this program might benefit the agencies that join, there’s a considerable gain that Klaviyo gets in return:
- Agencies connect them with more potential clients, effectively extending their sales and marketing reach through trusted advisors.
- Agencies trained in Klaviyo’s platform deliver superior results, enhancing client satisfaction and boosting Klaviyo’s customer retention.
- Agency partners display their Klaviyo partnership on their websites and in Klaviyo’s partner directory, increasing brand exposure to potential clients.
- Klaviyo collects valuable insights and product feedback through close relationships with agency partners managing multiple client accounts.
- Klaviyo’s agency partnership program incentivizes referrals, with commissions provided for new paying customers, contributing to Klaviyo’s revenue growth.
Essentially, every ecommerce company that goes to one of the 5,000+ agencies in Klaviyo’s network will become either a new user (because the agency recommends the platform) or a better user (because the agency shows them tips and tricks).
Room for Growth — Investing in Content
The recent controversy surrounding Klaviyo highlights the downside of relying on a few marketing channels to generate traffic. Especially channels that rely so heavily on brand.
If the strength of the Klaviyo name continues to dip, the number of new customers coming in through word-of-mouth, brand recognition, or agency referrals could decrease as well.
That’s why adopting a content investment mindset is so important in the current SaaS space — particularly SEO content. The more non-branded SERP real estate you have, the less dependent you are on name recognition and direct traffic.
Unfortunately, Klaviyo is lagging behind competitors in the content marketing game. Just take a look at their organic traffic share compared to some other marketing automation brands:
- ActiveCampaign: 32%
- ConstantContact: 24%
- MailChimp: 21%
- Klaviyo: 16%
Sure, the difference between these shares doesn’t seem massive, but remember: 85% of Klaviyo’s organic traffic comes from branded search terms. That’s not a very diversified SEO moat.
The Klaviyo blog currently has just over 300 pages and brings in about 6,900 visits every month. That represents just 2.4% of their organic traffic.
Klaviyo’s SEO disadvantage compared to these other brands is even more pronounced when you look at the blogs:
- Activecampaign blog: 471 pages, 73,400 monthly visits (19% of organic traffic)
- Mailchimp resources: 1,972pages, 1,162,000 monthly visits (22% of organic traffic)
- Constant Contact blog: 1,522 pages, 278,000 monthly visits (37% of organic traffic)
Granted, these competitors all had at least a decade headstart on Klaviyo in terms of building out their TOFU marketing content. But even competitors with a more direct market overlap, like Omnisend, Triple Whale, and Sendlane, are experiencing more success:
- Omnisend blog: 709 pages, 91,700 monthly visits (75% of organic traffic)
- Triple Whale blog: 350 pages, 4,360 monthly visits (46% of organic traffic)
- Sendlane blog: 204 pages, 1,173 monthly visits (20% of organic traffic)
Omnisend is a great example for Klaviyo to compare and contrast against. The brand has gone all-in on the TOFU content: 8 of their top 10 organic traffic drivers are blog posts that target keywords like “advertising for ecommerce” and “email automation.”
The good news is that Klaviyo has the resources to build out an SEO moat fairly quickly — they just need to direct their enterprise content marketing engine toward this type of content.
Klaviyo already has lots of informative long-form content like case studies and support documentation on their website, so they clearly have the capacity to create great content.
And with tools like ChatGPT and Jasper, they can quickly scale production (as long as they adopt an EEAT-friendly AI content workflow). It’s just a matter of directing some focus towards SEO-driven assets.
The Klaviyo team can also look to other SaaS niches for inspiration. For example, NerdWallet’s SEO cluster strategy has helped them attract tens of millions of visitors at a value of over $80 million. Klaviyo could use a similar strategy to create content clusters around keywords that speak to core features, like “customer data platform,” “email marketing,” and “SMS marketing.”
As a company that’s rooted deeply in brand, they also have a great opportunity to capture traffic around ecommerce brand-building. Creating more pieces like this is a great place to start:
B2B Branding Isn’t Dead — Learn How to Build
Klaviyo’s growth is all the more impressive, considering they have primarily leveraged just a few channels. It’s a good reminder that branding and strategic relationships are massively important for product-led companies. Investing in and living your brand story can go a long way, especially if you have the right partnerships in place.
Despite what you may hear on LinkedIn or X, B2B branding isn’t dead. It just needs the right mix of organic support.
To learn how other major SaaS brands have developed a balanced approach to brand and content marketing, check out these case studies:
