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Learnings from Mixing Freemium and Trial: The PandaDoc Customer Value Journey

PandaDoc has been in business for more than six years. And while it always had a 14-day free trial as part of its sales funnel, once the world stopped in March 2020, its product suddenly became essential for commerce to function remotely.

Within 48 hours, we decided to bring a freemium product to market. Then, in less than 24 hours, PandaDoc launched a free plan. This sequence of events was pivotal in thrusting PandaDoc’s e-signature capabilities into the mainstream, with the remote office model acting as the genesis of internal and marketplace success.

In this article, we’ll review what the PandaDoc team learned from this experience, focusing on:

The Three Steps to Finding Your Freemium Product

Knowing which features should be accessible is one of the most challenging factors when choosing a freemium model, because you want to onboard users without cannibalizing your paid product.

But these three steps will unlock your product’s freemium potential in the customer value journey.

PandaDoc sign-up page

Step #1: Provide something that works

Don’t create something “gimmicky.” Instead, create something that works. COVID-19 has been unprecedented, and PandaDoc quickly realized that our freemium product was a big part of the customer value journey. And for it to be successful, it had to be meaningful.

When businesses quickly shifted to a remote platform, a freemium product that offered unlimited e-signatures became immediately necessary. So while we were setting the scope of our freemium product, the first thing we decided was to allow unlimited documents through the system for signatures.

Step #2: Differentiate your product

We quickly realized we needed to differentiate ourselves from PandaDoc competitors. To do this, we decided to include integrated payments as part of our core product. With COVID-19, getting paid was critical to the survival of small businesses. Hence, the integrated payment system in the freemium product helped accelerate the customer value journey.

Step #3: Define your paid features

Like many product-led businesses, we recognized that the company’s survival depended on our paid plans. So, our team decided that key features like templates, analytics, and integrations would remain separate from the freemium product. 

Here’s what resulted:

PandaDoc compare plans

As most of PandaDoc’s business comprises small-to-medium businesses (SMB), having templates, analytics, and integrations remain on paid plans proved to be an effective strategy. While our team did quite a bit of research into whether we should change the scope of our free plans, we ended up making no major changes since these plans were performing so well.

Three Main Lessons We Learned

Here are three lessons we learned at PandaDoc while launching our freemium product at breakneck speed in March 2020.

Lesson #1: Don’t fear the freemium

The insecurity of self-cannibalization can be paralyzing, but the reality is that it can act more like an addition and accelerate the customer value journey than a product that overlaps. While you may have some overlapping, especially initially, it’s successful as long as you’re growing.

Lesson #2: Understand customer intent

The user type of a freemium customer versus a trial customer is quite different. The freemium product attracts users that have an immediate need. Trial users, meanwhile, are generally teams looking for solutions in their workflow processes — for them, it’s more of a business decision.

For freemium products, there’s an intent to use it right away, whereas with trial users, there’s an intent to find a solution for workflows. Both freemium and trial have their place — and it’s essential to understand how each user's intent applies to your product.

Lesson #3: Keep it simple

Ensure you have a straightforward and consistent onboarding system that consists of a pricing page detailing your free plan alongside all your paid plans.

PandaDoc pricing

Initially, we used too many links, and users became confused or lost within three to four clicks. However, by streamlining and keeping things simple, we were able to increase onboarding.

In this approach, less is always more. Make it simple for the user to understand their options and move on from there.

What We Learned from Our Mistakes

It can be difficult to anticipate every little detail when making the switch to freemium. Looking back on our journey at PandaDoc, we definitely wish we’d done some things differently to make things easier. Here’s what we learned.

Product-Qualified Leads (PQLs)

As mentioned earlier, the user type between freemium and trial is quite distinct. PQLs were initially introduced to PandaDoc from both the freemium funnel and main trial — something that confused our sales teams.

As part of the cleanup to distinguish these two user types, we streamlined our user base by eliminating the self-assisted funnel from our freemium product. Instead, we made it easy to upgrade and unlock trial capability from directly within the freemium product. Then, from the trial experience, a user enters the regular funnel and becomes a PQL.

This differentiation took several months for us to define. We now realize it could have happened more quickly with specific independent experiments across both funnels.

Start segmenting earlier

The arrival of COVID-19 forced businesses to adapt at a faster pace than ever before. In the process, we tried to optimize right away in an effort to capitalize.

Don’t do this! Instead, take a step back to:

  • Study user behavior
  • Study user profiles
  • Go through your jobs to be done
  • Conduct experiments

Taking time to follow these steps will help you optimize more quickly based on user intent.

Don’t wait! Pursue freemium now

While there’s always some concern about potentially cannibalizing your business, it works for top freemium companies such as Zoom and Slack. And many companies don’t seem to get there quick enough.

Unexpected benefits

While we certainly made mistakes along the way, there were also unexpected benefits to launching our freemium product:

  • Firstly, it was a significant growth driver
  • Secondly, it opened channels with partners to roll out distribution — a key for integrations
  • Thirdly, it helped us realize and confirm the future is product-led

The future is product-led

In the 1990s, the only motion for selling software was direct. Since then, however, the direction has shifted toward freemium and trial experiences, especially in the last few years. Going product-led makes it easy for anyone to evaluate a product on a no-risk basis, no matter where they live. This accelerates the customer value journey — which in turn makes for prime PQLs.

As the future of the office model remains ambiguous in the COVID-19 era, there’s now a huge global opportunity to embrace product-led growth. This makes product-led growth an incredible opportunity for any company.

Bernard Desarnauts
Bernard Desarnauts
VP Product at PandaDoc