Freemium is a gateway to the Big Leagues


The evolution of sales

Out of the SAASTR conference it’s apparent that there is still a lot of work to do in educating the market on freemium models. What success looks like at an individual level is when that SAAS can shift from a seller-centric universe (where the SAAS (vendor) holds the keys) to buyer-centric universe.

This starts by putting the buyer into trial environment, customising to the buyers needs in real time. We have implemented this at Adduco, putting people in a free seat and then offering a portal in which -when they’re ready - they can connect their data to demo what their audience and information looks like on a paid full/enterprise plan. This has been working amazingly - imagine if you could preview what your house will look like before you paint it? Salesforce has this concept nailed - in their enterprise trials they typically allow 30 days run with 5 users, but the salesperson could toggle up to more days and/or seats to sweeten the deal and allow the buyer to run around for a little longer. Dropbox is another example, but instead they had a virality model that works insanely well - you share to a friend, that friend needs Dropbox to access all the features to do anything they desire with that shared content.

This is all becoming an expectation now when interacting with a SAAS - here’s 3 things that you can mull on to see if your SAAS fits with the new standard:

Seek to create value, not extract value

To make freemium work your mission here will be to focus entirely on earning goodwill and loyalty from your buyer and parsing that into a business model. HubSpot is a fantastic role model here, building ‘success tools’ that people were organically drawn to, offered a lot of value and were repeatable tools that fostered trust for the HubSpot brand over time:

  • Hubspot success tool 1: website grader. Produced so much goodwill with the tool, makes it easier when meeting the buyer

  • Hubspot success tool 2: Content generation machine. Whatever the search was, Hubspot showed up first on google.

Hubspot met the buyer with these tools as if Hubspot was a person. The way they came up with those tools and how they have built such a strong, value-dripping inbound model started with them putting their sales people in a classroom for 2 weeks, show them what it means to be a small business owner.

On the other side, a Slack signup is a technical buyer who wants to get hands on product and figure it out for themselves. Slack designed a product that is so slick and intuitive that it adds value right from the get go - they can onboard and work the product without talking to a single human. So by the time it makes sense to pay for Slack, you’re grateful and appreciative of what you’ve gotten so far…essentially making purchase conversation easier. In this buyer-centric SAAS world you need to stay aware of all the stages and mindsets in that buyer’s journey. Be aware of their problems, topics, use cases and assure them that your product meets their boxes.

The pathway should evolve constantly

Map and be super cognisant on when it does and when doesn’t it make sense to purchase/convert with your product. You start this by asking and being clear on what it means to use the product, what are your customer value propositions in that moment? I’d then break that out and segment again and again, seeing how proposition changes and how the pathway, ergo most apt time to convert changes.

Challenge yourself to think in the buyers language and think of the kinds of questions that you’d arrive on all the time…how does your buyer spend their day? It’s critical to remember that when it comes to specialisation that you don’t just set it and forget it. Keep iterating, create cyclical processes to review and iterate.

Jump all the way in

Today’s enterprise buyer is the same as yesterdays enterprise buyer. They haven’t changed all that much over the last 10 years, still carrying the same processes, politics, caveats and so on. Freemium didn’t save that - but what freemium does is it gets you into brackets in large enterprise organisations. It allows you to base that conversation on a more attractive trial proposition. It lowers the noise and time and cost required to test a SAAS solution - it is clearly evident that it’s the new standard, a demand from organisations with 5 seats to enterprise with 5,000 seats.

In a room full of 500 people at SAASTR it was so clear that the equivalent time and focus needs to be spent on freemium as spent on your enterprise plans. Ensure that the customer grows with you and sees value everyday. It may well be worth putting as much focus onto your freemium pipeline as you do your enterprise pipeline.

What to ask your team:

  1. Where are the pockets in which we can create value, rather than extract value?

  2. Where can we meet our buyers where they are - when are the right and wrong times to buy our product?

  3. How can we differentiate/tweak our success tools to speak to different segments?

  4. How can we make our freemium product and buyer journey a better experience?

Rees Vinsen