Arcade's 4 key growth loops that drive their 10k+ customer growth

Hey 👋 there!

In today’s newsletter, I am beyond excited to nerd out on:

• Arcade’s 4 key PLG loops:

  • Manufactured engagement loop

  • Viral invite acquisition loop

  • Usage-based free-to-paid monetization loop

  • Seat-based expansion monetization loop

• How I am currently using Arcade at Labelbox

  • A test that led to a +70% increase in CTR and influenced a 58% increase in overall MQL rate

• Why Arcade’s PLM strategy is worth talking about

• Recent 🤩 LinkedIn posts worth sharing in case you missed them

Total reading time: 8 minutes

Arcade is a seed stage startup with $5M+ in funding where their users can create interactive demos that convert in minutes. Within 2 years and instant PMF, they have over 10k+ customers! Today, I’m going to share why you should keep a close eye 😉.

Not only is Arcade deploying great PLG tactics, but they are also leveraging a couple of PLM strategies I’ve written about previously that help drive their marketing efforts.

Arcade’s key PLG loops

To start, here are two examples of growth loops.

A retention loop is:

1. Trigger

2. Channel

3. Reward

4. Action

5. Trigger

A new user growth loop is:

1. New User

2. Action 1

3. Action 2

4. Action X

5. Output New User

Let’s apply these to Arcade’s PLG loops.

Free-to-paid conversion may not look like a loop. After all, it’s just a conversion rate. However, each step in this flow can be enhanced to ensure the conversion rate is maximized (i.e. upgrade screen, evidencing gates, etc).

3. Monetization Expansion Loop: seat-based 💰️ 

Arcade’s paid-to-paid conversion rate (aka expansion) strategy is going from solo to team. They bundle collaboration and integration features in their next plan: Growth.

The expansion loop is similar to the free to paid loop but in this case, the paywall is due to a member limit.

At only $12/person/month, this doesn’t seem like a big jump. The features offered align with their product category: collaborative horizontal SaaS. With this upgrade, you get access to collaborative features such as

• custom branding and themes

• integrations

• insights for sales

• share and collaborate

These features ultimately drive up usage and engagement because the feedback loop is created for repeatability: Create demo → deliver value → increase sales → create more demos.

4. Engagement Loop: Slack integration (manufactured) 🫰 

I currently use their Slack integration loop which I believe is one of many engagement loops they have, but it’s the one I want to evangelize.

Arcade has a built-in native integration with Clearbit. You can see which logos view your Arcade demos. These companies are sent via Slack integration.

Their engagement loop works as follows:

1. Step 1 = A logo views demo

2. Step 2 = Slack notification ping is sent with the top 5 list of logos

3. Step 3 = Immediate dopamine felt from the team

4. Step 4 = We click the CTA from Slack into the App to see more info on these logos

5. Step 5 (optional) = Get sales involved

Here is an example Slack notification.

Every slack ping encourages teams to open up Arcade to get a deeper look at which logos are worth pursuing. Arcade also Slack pings the team whenever a new demo is published (#collaboration).

The complete growth model map ⭐️ 

Putting all these growth loops together and you get something like this:

The full growth model map combines all the loops. The engagement loop and acquisition loop are double-sided and fuel each other. Growth loops can compound and work well together, but only if you follow the must-haves!

The growth laws of physics you can’t fight:

1. Without retention or strong engagement → you cannot grow sustainably

2. It’s imperative to solve for strong NPS, retention, and core UX that aligns with your SaaS category (i.e. Arcade’s growth is dependent on how well teams collaborate, so optimizing for team network effects is critical) or you will not grow sustainably.

3. Retention (PMF) → which grows Acquisition → which feeds conversion rate → which grows revenue. This order matters!

I highly recommend a good exercise of drawing growth loops (even if they are not loops yet) so that you can stress test different growth strategies. Once you draw it out, it becomes clear what needs fuel, what needs optimization, and what will not be sustainable.

How I’m using Arcade to drive conversions & sales

At Labelbox, I’ve been working with the Marketing team to ship our very first Interactive Product Tour Hub.

The hypothesis supporting a demo hub is this:

Check out more data supporting this hypothesis here.

The methods of traditional marketing where we expect prospects to read 4-5 product pages of copy explaining why your product is going to deliver value, and is then ready to book time with a sales expert to then also not see the full product demo is very outdated.

One of the major pillars of PLM (product-led marketing) is creating dynamic product experiences for those who don’t have to sign up to use the product.

The product tour test

I tested primary and secondary metrics.

1. Primary: the CTR % on the homepage Take a tour copy vs Contact sales copy

2. Secondary: Overall lift in MQLs on the sales form page

Below is the simple CTA change from Contact sales to Take a tour.

The results 🤩 

Notes about the test:

1. This was not a split A/B test, this was a pre/post test which is not ideal, however, we did reach stat sig on the pre/post lift test

2. While we see a higher CTR and form fill rate, we see a lower sales form page view conversion from the demo page.

3. We concluded that the interactive demo tour hub successfully gained interest from our prospects and our next effort is to build captivating demos to continue driving the MQL rate up!

Product-led marketing & Arcade

Not only does Arcade have PLG loops, it also leverages a fantastic PLM strategy. Product-led marketing is not a PLG strategy, it is a marketing strategy ✅.

Why interactive demos are a key PLM tactic

On average, companies that use interactive demos see a 16% increase in website conversions. See the latest data and story in a previous newsletter written by the Head of Growth at Navattic:

To save time, you can check out my deep dive into why interactive demos work:

Arcade leverages two PLM tactics: interactive demos (duh) and a meta experience

The Arcade demo product has over a dozen features. Right on their homepage, you can view a product tour of their product using their own product 🤯.

They are feeding two birds with one scone with this. By showing their product using their product - they ✔️ off the Meta Experience of PLM in addition to just using an Interactive Demo.

In their interactive tour on the homepage, they showcase features:

1. AI text

2. Custom themes

3. Audio overlay

4. Pan and zoom

5. Video bubble (move aside Loom)

6. …and many more

I am impressed by how many of their features they cover in the homepage product tour. 💪 

If you’re curious about all the details of PLM, check out the open-source database of 300+ examples of PLM tactics (including Arcade):

Recent 🤩 LinkedIn posts in case you missed them

1. Kate Syuma - 6 Steps of Holistic User Onboarding

2. Elena Verna - 6 Tactics to improve voluntary churn

3. Adam Jarczyn - Activation Velocity of 3 cohorts

4. Anthony Pierri - Homepage vs Awareness Stages framework

5. Natalie Marcotuliio - 461% increase in qualified pipeline with demos

6. Aakash Gupta - Great cancellation flow can supercharge you retention

Thanks for being a reader!

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See you next time! 👋