Deciding whether a free trial, freemium, or hybrid model will work best for your business is challenging — especially as choosing the wrong one could potentially dent your business’ performance.
In this course, you’ll learn:
Wes Bush:
So what's your shade of product-led? I've gone through a bunch of considerations that you need to make and I'll go through a couple that I haven't touched on so far, but I am hoping by now you should be, at least looking at some of these and saying, "That one looks like a good fit." So one we haven't touched through is free trial then freemium. So I'll give you an example. This company was in the sales intelligence space. They basically helped your sales team become more efficient and close better, bigger and better deals. And so they had a sales product where they had a premium free trial. So when I say premium free trial it usually is like, they give you access to everything in the product. And so they have that going. And then they also had a Chrome extension and this Chrome extension would integrate into your Gmail or even Outlook if you wanted.
Wes Bush:
And so what was great about that is well, this Chrome extension would tell you more about your contacts within your email outbox. And so it was super helpful, but when the free trial ended, they still gave you access to that Chrome extension. So it was freemium from the get-go and what was great about that is when you think about it from a branding opportunity, it was quite powerful because every time I logged into my inbox, I would see Nudge.ai's logo, I would see relevant insights about my contacts. And so it was providing value. And for Nudge, it was also providing data. I was supplying them data and they could run their business more effectively because I was giving them data. And so when you're thinking about having this eternally free freemium, also think about what kind of value could I get from these people?
Wes Bush:
Sure, there's the hard cash at the end of the day, but data is also quite valuable in a lot of SaaS companies. All right, so the other piece I'll cover is freemium then a free trial. A lot of platforms use this approach. Whenever we think of HubSpot, HubSpot has their CRM for free and that will never go away. And so it's a good gateway drugs into their product, whether you want to use their marketing, sales support solutions. And then if you want to upgrade to a different piece of their platform, let's say the sales piece, it's a free trial. 30-day free trial, you get to experience it, see if you like it. And what's great about this approach for platforms is that it gets people within the ecosystem. They can see all the products, they can taste test them one at a time, because if you're just tasting them all at once, there's no way you're going to really be able to explore everything within that platform very easily.
Wes Bush:
So freemium then a free trial works very good for platforms. Usage-based free trials, we did touch on this with the Appcues example. If you have a product that is dependent on someone else, let's say you sign up your product person. You need someone else to see value from that product within your company and there's extra hoops to jump. A lot of times usage-based could be a good option because that time limit isn't dependent on that person. And so it's really helpful for them. The other thing is new product-led arm of the business. This I've seen work firsthand myself at Vidyard and in a bunch of other businesses where it's already pretty much sales-led, even HubSpot started with this with their sidekick product. And so this is good because you can test out the product-led, go to market strategy, really build that muscle within the business and it's not a core piece of the business.
Wes Bush:
You're not really rolling this out on the main product line, the main cash cows for the business. And so the amount of resistance you're going to get from the business is much lower. And so for that reason, if you are in that sales-led company, sometimes this is a good place to start. Not always because you don't always have to reinvent the wheel or create a new product. You want to obviously make a complimentary product at the end of the day too, but that's something to consider. And then the sandbox environment. So Amplitude has a sandbox environment and they're in the same kind of boat as Appcues, where product folks will sign up for this. They want to understand the analytics of the product in this instance. And so what do they have to do? Well, they have to talk to the development team, get the inputs right, get the metrics into their products, and that requires a lot of sometimes custom coding, setting it all up.
Wes Bush:
And that whole process could just take it a month to get it all set up. And then you're looking at maybe a few more months to get meaningful insights around your product, how people are using your product. And so that's a long time, but if you just want to see what the product can do very quickly, a sandbox environment can be a good use case. The only caveat here is it's way less powerful than showing people the value of your product. But if it takes months and months and months and months of time for people to experience the value of your product, it is an option for people to quickly get a taste test before they interact. And then there's always hybrid models. Where do we involve sales? A hybrid can encompass all of these, but I do want to put it here because when you're thinking of when does sales reach out, it could be at any point in all of these, but you really want to align it with once someone has experienced about the product, that's when sales has the best chance of closing that deal.
