In this episode, we’re going to dive into PanaDoc’s freemium launch during a pandemic.
Show notes & key topics we’ve discussed:
00:00 – 6 freemium tips from Claude Hopkins in his book Scientific Advertising.
02:34 – What is Product-Led Growth?
04:27 – How did PandaDoc launch their freemium and Why?
11:12 – How do you balance between freemium and free trial offering (if you have both)?
14:49 – How did you actually make sure that salespeople keep getting the leads in freemium?
16:29 – What happens if people downgrade because of freemium?
18:49 – What metric was moved by Product-Led Growth strategy i.e. freemium?
21:22 – Did they change lifecycle emails from free trial to freemium? How do you find a balance?
23:12 – How should you think about value metrics and pricing to not lose business while launching freemium?
25:57 – When is the right time to launch a freemium offering?
Key Lessons and Learning on Freemium
Freemium is a slippery slope. It can work for you but needs to be done right.
Product-Led Growth is a new buzz and everyone wants to launch freemium these days.
So, I asked Tanya to share PandaDoc’s freemium story (especially because they failed the first time)
But freemium and PLG aren’t new concepts. You can look at freemium tips from Scientific advertising below.
6 freemium tips from Claude Hopkins in his book Scientific Advertising.
- THE product itself should be its own best salesman. Not the product alone, but the product plus a mental impression, and atmosphere which you place around it. However, expensive, they usually form the cheapest selling method.
- Samples enable one to use the word “Free” in ads. That often multiplies readers. Most people want to learn about any offered gift. Test often show that samples pay for themselves — perhaps several times over — in multiplying the readers of your ads without the additional cost of space.
- PLG: bear in mind that you are the seller. You are the one courting interest. Then don’t make it difficult to exhibit that interest.
- Hand raise: An inquiry means that a prospect has read your story and is interested. He or she would like to try your product and learn more about it. Do what you would do if that prospect stood before you.
- Focus on demonstrations in stories, there is always a way to get the same results at a fraction of the cost.
- Give samples to interested people only. Give them only to people who exhibit interest by some effort. Give them only to people whom you have told your story. First create an atmosphere of respect, desire, and expectations. When people are in that mood, your sample will usually confirm the qualities you claim.
What is Product-Led Growth (PLG)?
Product-led growth is when you use the product as the primary driver of acquisition.
Typically, this means that your product delivers a model that includes a freemium or offers a free trial. This is a disruptive, bottom-up sales model…where employees of an organization can choose what products they want to use instead of being forced to use certain tools by IT or operations departments in a traditional top-down approach.
I asked Tanya some PLG related questions that are interesting for growth folks.
How do you balance between freemium and free trial offering (if you have both)?
Freemium was launched based on free features that are the easiest and quickest to adopt. Freemium features are to acquire new leads and free trials are to get your sales team signals that on some features that those leads might be more interested in.
How did you actually make sure that salespeople keep getting the leads in the freemium model?
Just make the user turn on free trial features. So, that’s how we qualified the leads and their intent.
What happens if people downgrade because of the freemium offer?
There will be people who might downgrade. You don’t want them anyway but keep serving them with the basic free features. To be honest, we’ve not figured it out yet ourselves.
What metric was moved by Product-Led Growth strategy i.e. freemium?
We didn’t move revenue metrics that much but NPS improved because a lot of users were using free features and virality.
Did you change lifecycle emails from free trials to freemium? How do you find a balance?
Yes, We did. We often send metrics or triggered-based emails. We don’t overly send a lot of emails to freemium users.
How should you think about value metrics and pricing to not lose business while launching freemium?
Short answer: The features that are easiest to use and the quickest to get adopted. Plus, you should limit the users based on usage. For example, at Userpilot, you can limit them with the number of flows if people are making more flows.
When is the right time to launch a freemium offering?
After $10mn ARR is a good time to launch because you don’t care about low LTV users. It amplifies if you have a nice sales process.