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- Grammarly: $13 Billion Growth Strategies
Grammarly: $13 Billion Growth Strategies
Turning post send anxiety into writing envy at scale.
Growth Classics
September 16, 2024
Grammarly has built a $13 Billion behemoth by executing relentlessly on fundamental business and psychological principles.
Turning post-send anxiety into writing envy at scale.
What is Grammarly?
Grammarly is a digital writing assistant that helps users enhance their writing by offering real-time grammar, spelling, and style suggestions across various platforms.
In this breakdown, I will look at some of those core strategies that built them into the company they are today.
TLDR on Why Grammarly Has Won Big:
TAM = Everyone Who Knows English (Over 1.3 Billion People)
Extreme Product-Market Fit: No one wants to look unprofessional when writing. They've built an exceptional product that instantly solves customers' problems and is available for free everywhere, driving significant word of mouth.
Takeaway: Building a world-class, customer-obsessed product makes user acquisition easier.
From a Standing Start to Improving Your Writing in Under a Minute:
Extreme Time to Value
An SEO Strategy That created a Virtual Sales Team Working 24/7/365
Building an Irresistible Freemium Offer That Skyrocketed User Growth
Developing a Product & Partner Ecosystem That Integrates Grammarly Wherever You Write
Incorporating Fundamental Psychological Principles into Every Aspect of Their Product
Full Commitment to AI: Now, you have a personalized professional proofreader available wherever you are, whenever you need it.
24/7 Customer Support
Founding story in 30 seconds:
In 2009, three ambitious Ukrainian entrepreneurs—Alex Shevchenko, Max Lytvyn, and Dmytro Lider—had a simple but powerful idea: to solve the universal problem of bad grammar.
They launched Grammarly, initially aimed at helping students improve their writing, offering it as a paid subscription online.
Quickly, Grammarly became cash flow positive.
By 2012, they pivoted to target a broader audience, making Grammarly a tool not just for students but for everyone—including corporate users engaged in higher-stakes writing.
Then came the game-changer.
In 2015, they launched the Chrome extension, turning Grammarly into an everywhere-you-type tool. This was also the moment the company switched to a freemium business model.
By 2017, they expanded to mobile and desktop, embedding themselves into the daily routines of millions.
And by 2023?
Grammarly’s AI-powered writing suggestions had propelled them to a staggering 30 million users.
Grammarly’s site in 2010:
Grammarly 2024:
Growth Strategy Example 1 - Dominate SEO
Of Grammarly’s traffic, 50.3% goes to the blog, which has 2,468 pages, 1,699 of which are blog articles. (source)
Traffic that’s worth millions.
Let’s break down how they’ve done it.
TL;DR:
Deeply understand your customer's problems.
Find out what they’re searching to solve these problems.
Create content that over-delivers on solving their problems.
Gently nudge them back to your product with an irrefutable offer.
Rinse and repeat.
1: Identify the Problem
Millions of people write every day and are desperate to avoid embarrassing themselves by making a glaring mistake.
This taps into people's desire for competence but what motivates people even more than competence, is loss aversion.
2: Target High-Intent Traffic
Grammarly’s blog is divided into two main categories:
Typos
Grammatical questions
Here are some of the most popular keywords for which Grammarly ranks right at the top of the search results:
For example, the page that defines nouns gets 100k+ sessions to Grammarly a month as well:
3. Overdeliver with your solution
At the moment if you google “What is a noun” and you click on the top two searches, this is what you get:
Google’s no-click definition
Merriam-Webster
Instead of giving you a textbook classical definition Grammarly goes above and beyond to make sure you leave knowing exactly what a noun is, and how to use it in every situation imaginable.
Some of the headlines in the article include:
Proper nouns vs common nouns
Types of common nouns
Nounds and number
Forming plural nouns
Countable nouns and uncountable nouns
Nouns and the possessive case
Nouns as subjects
You get my point….
4. Lightly Drip the Product Upsells
Let’s be honest—most people aren’t concerned with the definition itself.
They just don’t want to look stupid when writing.
Their main concern isn't about mastering countable nouns; it's about avoiding the embarrassment that comes with writing mistakes.
Sell the solution to their anxieties through masterfully crafted content.
These blog articles are a masterclass in giving value and then selling the solution.
Upon arriving at the page, visitors are immediately greeted with a pop-up offering a free, real-time personal writing assistant. This tool not only addresses their immediate problems but also offers continuous support, ensuring mastery over possessive nouns without requiring active effort on their part. The best part is that it does it for you without you having to think.
As you scroll, you realize how much value Grammarly gives away for free in their blog articles; this builds brand credibility in your mind.
You’re then met with a sticky banner that again offers "real-time suggestions, wherever you write."
And it's free—what’s not to sign up for?
In the next section, Grammarly offers readers some “tips” to help them with their writing.
This is a perfect way for Grammarly to plug their plethora of free tools and guides:
It comes as no surprise that all these roads lead back to the Grammarly product.
Takeaways & Reflection Questions:
Do you know what your users were searching for when they found your solution?
Do you know exactly what problems your product solves?
Does your content overdeliver? Is it shareable and unique?
Honest question: Is your welcome offer compelling enough?
Growth Breakthrough - Introducing a Freemium Business Model
For the first six years, Grammarly was primarily a pay-to-play platform, initially targeting university students and over 250 institutions. This strategy propelled them to over $10 million in revenue within the first three years.
Seeking to expand their customer base, they then pivoted to a freemium business model. The introduction of a Chrome extension transformed Grammarly into an omnipresent assistant in users’ browsers, offering a perpetually free tier with the option to upgrade to a professional tier for a subscription fee.
Chrome extension here
“The Death Valley” is a crucial area for freemium products to focus on. They need to strike the right balance between giving free users a great experience to keep them coming back, and introducing enough frustration with limited features to encourage a conversion to the premium version.
One of my favorite examples is Strava. The free version is great, but I wanted real-time updates on my run splits every 1km to better judge my pace. This feature, where an AI voice updates you in real-time, is available only in the premium version.
Discover those must-have features for your customers, position them just beyond the paywall, and effectively tease these features.
Why This Freemium Strategy Works for Grammarly:
Time to Value: The value of a product is evident in how quickly a user experiences its benefits. Grammarly’s frictionless onboarding through the plugin means users immediately see improvements in their writing with minimal information required at sign-up.
Forming a Habit: Having Grammarly available 24/7 in the user's browser creates a positive feedback loop, constantly reinforcing the product's value and habituating the user to rely on Grammarly for error-checking.
Removing All Barriers to Use: The easier it is to access, the more likely people are to try it. Offering Grammarly for free has significantly boosted its initial user growth.
Teasing the Value: Users get a taste of what Grammarly Premium can offer with free allocations of premium suggestions. This approach highlights the substantial benefits of upgrading, creating a sense of FOMO and seeding doubt about the quality of one’s writing without the premium features.
Conversion Strategy 1:
Each day, Grammarly allocates a number of premium suggestions related to aspects like tone and sentence structure. By showcasing what users are missing, Grammarly creates a sense of FOMO. This strategy plants a seed of doubt that one's writing could be significantly improved with the premium version.
Conversion strategy 2:
Smart pricing for the pro plan.
This pricing page is effective due to several psychological principles:
Anchoring: The highest price ($30/month) sets a reference point, making the other options appear more affordable by comparison.
Decoy Effect: The quarterly option is less attractive, subtly guiding users toward the annual plan, which seems like the best value.
Scarcity & Urgency: The "Save 60%" tag on the annual plan creates a sense of urgency and perceived scarcity, encouraging immediate decision-making.
Framing: Highlighting the annual plan as "Most Popular" leverages social proof, suggesting it's the best choice.
Conversion Strategy 3:
Email Drip Campaigns:
Honestly, I wish I could do a better job of breaking down Grammarly’s email drip campaign than the analysis provided here, but I can’t. If you want to check out the details, click the link below:
My key takeaways from each section were:
Welcome Email - Free User Campaign:
Initial Emails:
No hard sell
Gets the user excited about the free product
Demonstrates how to maximise every aspect of the free product
Highlights how to change communication preferences, thereby creating trust
Introduces all the other ways they can access Grammarly for free, e.g., app/mobile keyboard
Subtly promotes Grammarly Pro at the bottom of the emails, in case users are seeking additional features
Upsell Emails:
Frames Pro features around what users find most popular, emphasising social proof
Features simple and easy-to-skim headlines
Uses customer-friendly language, making Pro seem accessible to the average writer
Links out to the blog for more detailed explanations of each benefit. These blog articles provide more value compared to other competitors' content
Highlights the savings of the annual plan and nudges the upgrade, showcasing the value the user would receive by upgrading now
Introduces time-sensitive discounts with detailed benefit breakdowns to encourage conversion
Please check out the full breakdowns here:
Growth Strategy - Full Funnel YouTube for Grammarly Business Launch.
TLDR:
Using this full-funnel YouTube strategy Grammarly were able to achieve:
A 13% uplift in conversions at the same spending level as before.
Website traffic saw a 2.4-fold increase year over year
Organic search queries for “Grammarly Business” increased by over 100%
Full funnel YouTube strategy is when you’re spending on both CPM and CPA formats.
When Grammarly was launching their new offering “Grammarly Business” they needed to reach new audiences and find incremental new users.
They wanted to focus on long-term brand-building and not just performance-based conversion campaigns.
As ad spending increases, the available pool of potential users inevitably diminishes. This phenomenon leads to higher costs for acquiring the same number of incremental new conversions as before, thereby eroding long-term efficiency.
This is why Grammarly wanted to move to a full-funnel strategy to enable them to find new audiences and drive efficient incremental conversions through increased awareness.
How Grammarly uses video experiments to test ad sequences against a stand-alone ad.
Grammarly leveraged YouTube’s unique advertising features, specifically video ad sequencing and video experiments, to create a compelling narrative that resonated with their target audience. The core of their strategy involved:
Video Ad Sequencing: Grammarly developed a series of ads that unfolded a story in sequence. This approach aimed to build a narrative over time, each ad building on the last, which could keep viewers more engaged and encourage deeper understanding and interest in Grammarly Business.
Dynamic Story System: Alongside their main hero spot, Grammarly implemented a system that served different video sequences to viewers depending on their interaction with previous ads. For example, if a viewer skipped an ad, the next one in the sequence would be tailored to try and recapture their interest, possibly by presenting information in a new way or highlighting a different feature of the product.
Video Experiments: To optimize this sequencing strategy, Grammarly conducted video experiments. These experiments tested various sequences against a standard standalone ad to see which sequences were most effective at engaging viewers and driving key metrics like brand recall and conversion intent.
The results:
Using this full-funnel YouTube strategy Grammarly were able to achieve
A 13% uplift in conversions at the same spending level as before.
Website traffic saw a 2.4 fold increase year over year
Organic search queries for “Grammarly Business” increased by over 100%
Source 2021.
and Source 2021
How much is Grammarly spending on YouTube today?
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