Freemium Sales Strategy

Scenario

• Assume you are working as a PM in an Enterprise SaaS product, offering freemium services (like Atlassian, Canva, etc.). One of the problems that the sales team is dealing with, is identifying the key users out of the millions of free consumers, who are more likely to become paid customers. Subsequently, these leads can be offered tailored packages/discounts for quick conversion.

• Currently, the indicators are coming from multiple analytics sources like free trial engagement (using google analytics, etc.), sales queries (using Hubspot analytics, etc.), and support tickets (using Zendesk, etc.). You need to create an integrated view of all these different data points on a single analytics dashboard so that the sales team can identify the leads which are most likely to be converted.

• Create a proposal document to be shared with higher management, convincing them of your understanding of the problem, corresponding solution, major competitors (to make a decision if you should build or buy), high-level backend data flow, and success metrics.

Assumptions -

• The product under consideration has the aha moment identified. ( Aha moment - user derives the benefit from using the product. )

• Freemium model -

  • Model 1 - The product has two sets of features - basic and premium Upon signup, users are offered 15 days of a premium experience, and all features are unlocked. After 15 days, basic features are free for a lifetime but advanced features are not available.

  • Model 2 - The product has one feature but, free version has limited on usage. Free users get all of the same features as premium users; they just can’t use them at the same volume as premium plan users.

The freemium limit should be uncomfortable enough to motivate people to switch to premium. At the same time, the value has to be provided in an amount that keeps people using the product

We need to put limits on features used in the application that users tend to hit naturally as they move to more serious use

Millions of users are on platform, categorize

• Individual users

• Institutional users

  • SMB - (<200 employees)

  • Enterprise - (>200 employees)

User Types

• New user - User who has signed up for free plan and has not reached aha moment

• Activated user - User who has reached the aha moment, is still on free plan

• Dormant user - User who has completed their free trial and are not signing in anymore

• Active users- Activated users- Dormant users

• Premium user - User who has paid

Key Metrics to track

1. Total Signups

2. Active Users

3. Customer Acquisition Cost

4. Free to Paid Conversion Rate

5. Monthly Recurring Revenue

6. Pricing Page Bounce Rate

Sales Dashboard

The following are the data points that are needed.

1. User, Contact details (Email and phone), Role, Company (Analytics)

2. No. of times company Website visited, Details of visit (Dates, Duration and Source), Booked Demo (Yes/No) (Hubspot)

3. Average session time, Number of sessions (Google Analytics)

4. Features used, Number of times the feature is used (Google Analytics)

5. No. of tickets raised, Category of ticket (Product usage /Payment, etc), Status of tickets (In Progress, Resolved, Open) (Zapier)

6. Lead Score (Hubspot) (Check recommendation)

Firmographics Tab

• Industry Type

• Location

• Job Titles Registered

• Company Structure

• Company Size (number of employees)

• Annual Revenue

• Performance Over Time (growth rate)

Solutions available

• Listening to customers - If users have enquired about a feature, check the following

how many users are asking for this?

Does this feature improve the overall north star metric of the product?

• Responsive Support - For high-paying clients have dedicated support staff.

• Onboarding experience - Add sample data/ tooltips to help the user reach aha moment sooner

• Lead Scoring - Based on the desired user persona and user demographics, tools like hubspot arrive at a value based on user actions (Opening email, checking pricing page, booking demo) and past conversions.

• Email Automation - Throughout the life cycle of a quality lead, communication should be established. From the start, we set up the free-trial onboarding so that no user is ever left behind.

  • Design the onboarding experience - Each new free trial user receives a series of emails tailored to their usage (or not) of the important features (those features that lead to the aha moment)

  • Segment free trials with a variety of signals (mainly firmographics) and automatically send invitations for a sales demo call to the most qualified ones. This can boost monthly conversation to yearly conversation.

  • Send Reminder emails - offering a limited-time special discount and sending this offer a few days after users start enjoying your free product. This will create urgency and drive users to purchase quickly to ensure they get the discount. Sending reminder emails about free trial expiry will nudge users to revisit the product.

  • Reactivation campaign - send emails to free users who stopped signing in. The goal here is to reactivate them or motivate them to invite their teammates in the hopes that they will become champions of our solution in their companies and nudge their teams toward purchase. Options. - Email automation using Hubspot/ mailchimp

• Community Building - online user communities have a big impact in converting B2B SaaS users from free trials or freemium tiers to paid users. An online user community helps you provide them with relevant information as efficiently as possible. So that users can make a decision whether the product is really fitting their needs With a community, you have new questions, answers, and insightful conversations added on a daily basis. Plus, it’s done by peers, so you don’t have to scale up your own customer success team to make sure that everybody has access to the latest information.

Community platform options	Pros	Cons
Build a forum page on the website	Moderate the content, own the data,	Costly, need developers and maintenance
Community Platform like Circle, Mighty Network, Scenes	Conduct events, Analytics,	Costly min 99$ per month, need a community manager for activity
Host subReddit	Free, Helps in building an free for all community	Difficulty in understanding analytics,

Recommendation

If I had to pick a few of these solutions to implement then, I would approach the management team with the following, along with data solidifying these recommendations

• Email Automation

• Community Building

• Responsive Support

Further Suggestions

Customer Satisfaction - This activity did not address the churn of users. Premium users have to be monitored and satisfied so that they are not churning.

Refining the metrics around the cost of the sales team and efficiency metrics of the sales team that align with the operational cost of the existing system