In today’s highly competitive world, having excellent communication skills, especially writing skills, is a crucial factor. In the past, people were judged by the correctness of their grammar. However, with the emergence of personal writing assistant tools, writing grammatically correct content has become a hygiene requirement rather than a unique skill. These tools have completely changed the standards for writing. Now, the focus is more on the ability to write engaging content and effectively convey thoughts and opinions. One such tool that has had a significant impact on the writing community is Grammarly.
Grammarly is a personal writing assistant powered by AI technology. It is based in Ukraine and has grown significantly over time, becoming a behemoth worth $13 billion. As per the latest stats, more than 30 million people and 70,000 teams around the world rely on Grammarly’s generative AI solutions.
Along the way, it has outwitted some of the established companies in this domain. In this case study, we will take a closer look at the growth strategy of Grammarly.
Let’s begin by understanding where Strategy originates from and what the guiding principles for compiling one are.
The Company’s Vision forms the basis of its strategy, guiding its direction.
Grammarly Vision
Grammarly aims to build a comprehensive, AI-based communication assistant that helps people connect with and understand one another.
Business Model (Revenue Stream)
Grammarly makes money by assisting people to write better.
Revenue Streams:
- Premium Subscription (Individual & Business user)
- Grammarly Education (Partner with Universities)
- Professional Writing Services
Let’s do a quick SWOT analysis for Grammarly as a product.
Strengths:
- The most efficient AI-powered writing assistant developed leveraging language experts.
- Omni-presence – Desktop, Mobile keyboard, Plugin, Brower extension, etc.
- Powerful algorithms
- Effective Marketing Engine
- Intuitive interface
- Brand reputation
Weakness:
- Some of the killer features are only available in the Paid version
- False Positives and Negatives due to AI involvement
- Pricing barriers
Opportunities:
- Expand to other prominent languages
- Exploit the next-gen AI capabilities to enhance the algorithms
- Explore Partnership models with the World Universities and professional Companies.
Threats:
- Funded Competitors exploring this space
- Privacy and Data protection regulations
Before we discuss how Grammarly achieved growth, let’s first define what growth means for a business and where it typically comes from.
Growth has various connotations based on the scope. In the business context, growth simply put means the following:
- Attracting new Users
- Improving the engagement levels with existing users
- Pushing Free users to Premium segments
How does Grammarly attract new users: (Customer Acquisition Strategy)
Grammarly Blog – The blog is an incredible source of informative posts that provide insights into the art of writing effectively. The posts are crafted with specific target audiences in mind and are also optimized for search engines. As a result, they usually appear at the top of search results, making them a substantial source of new user acquisition.
https://www.grammarly.com/blog
https://www.grammarly.com/business/learn
https://www.grammarly.com/blog/category/education
Grammar Checker page – The Grammar Checker page is a free tool that allows you to input your content and check for any grammar issues. This channel is crucial for new users to discover Grammarly without signing up. Just simply search for “grammar check free” or “free grammar check” on Google, and you will most likely see the Grammarly Check page listed in the top three results.
https://www.grammarly.com/grammar-check
Advertisements – It’s highly probable that each of us has encountered a Grammarly YouTube advertisement while browsing through YouTube. These ads are exceptionally powerful and well-targeted, featuring high-quality production content designed to introduce new users to the benefits of using Grammarly. The YouTube ads showcase the features and functionalities of Grammarly, highlighting how the tool can help users write better emails, essays, and documents.
Here is an example for reference.
Partnering with Universities – Grammarly first started as a B2B product by selling to Universities. This strategy has not only increased the reach but also gave the company avenues to comprehensively test the product before penetrating the Consumer market.
Now that we’ve seen how Grammarly acquires new Users, let’s take a look at how it improves engagement.
How does Grammarly improve the engagement level of existing users:
Build a habit with the Freemium plan – Once you discover Grammarly through one of the acquisition channels mentioned above, you’ll be amazed at how it can help you produce error-free writing. With its two-color highlighting system, Grammarly quickly identifies mistakes with red, while amber indicates areas for improvement. Over time, by using the free version, you’ll develop the habit of producing writing that is free from mistakes – a habit that will hook you to the product. Grammarly subtly says – why stop there? The amber highlights are a constant reminder of the additional benefits you’ll receive by upgrading to the premium plan.
With its advanced features, including more detailed suggestions for improvement, it reminds you that you’ll be able to produce writing that is not just error-free, but more polished and professional. Hence, these nudge you to upgrade to Grammarly premium subsequently, if not immediately.
Omni-presence – One of the areas where Grammarly has outplayed the competition is by changing its strategy from bringing users to its platform to taking the platform to the users. The company made sure that its writing assistant product was available on all the platforms where users were required to write content. This approach has enabled Grammarly to reach a wider audience and provide more value to its customers.
Targeted Offers for Premium Plans – As mentioned in the habit-building strategy, offering targeted promotions naturally compel hooked users to upgrade to the Premium plan if pricing is their only concern.