Becoming Product-Led Without Going Freemium

7 minute read

Product-led growth (PLG) is here to stay. OpenView reports that 86% of SaaS companies are planning on increasing investment in their product-led strategies in 2021 (OpenView). Companies are looking to build an experience that excites prospects and get users in front of the product faster in the deal cycle.

The trend towards product-led growth is driven by a changing buyer demographic. Today, information is readily available and buyers are more educated on market offerings than ever before. Modern buyers want to experience the solution before ever talking to sales. It's no secret that product-led growth is the future of B2B software sales when looking to build the best buyer experience.

Traditionally, PLG is made possible in one of three ways:

  • A timed free trial
  • A free tier offering
  • Open sourced solutions

However, there are other ways to showcase product value without defaulting to freemium!

Follow the Free

SaaS product trial periods have one goal - convert trial prospects to paying customers. The free trial or freemium period presents a great opportunity for a potential buyer to evaluate and test out a solution to assess a business' product-challenge fit. They also present a unique opportunity to collect internal buy-in when shared across a buyer's organization. Trials are now commonplace with the rise of account-based access and increased ease to quickly showcase working product functionality. For many companies, the trial is an essential component of the overall customer acquisition strategy to get prospects excited about a solution to eventually convert.

However, these free trials can come at a huge cost.

Preventing Low Switching Costs

Prospects often use the trial period to sample multiple solutions. Given that there is essentially no upfront commitment (outside of a possible introductory call and exchange of information for future marketing efforts), prospects have no obligation. While this may seem obvious and inherent to the free tier, this lack of obligation means that your prospects can easily hop around to different solutions without any associated switching cost.

Freemium is Not Free

A free trial period can be quite expensive for a vendor. Platform hosting fees, training, product onboarding, and customer success time can quickly add up. New users to the platform are likely to have more questions and a need for guidance than an established user. This time spent is especially costly when the user is on a free plan or time-limited trial. The return on this invested time does not always make sense and can cost companies significant time and money.

Shortening the Deal Cycle

In our analysis of 5625 B2B SaaS marketing sites, we found that the "Start a 14-day trial" was the most common trial call to action followed by "30-day" then "7-day". The time-based trial is a common tool to drive early engagement and improve adoption, but the very nature of a time-dependent evaluation extends the deal cycle. A shorter deal cycle means that you can meet with more prospects, collect more product feedback, and ultimately increase revenue to hit your sales metrics. Additionally, prospects will often request for an extension to "show their boss who was on vacation" or "I got locked out with my access credentials". There will always be excuses to lengthen the trial and the corresponding deal cycle.

Does Product-Led Mean Free?

Consumers love to get a deal. At the end of the day, a free tier is a great deal. It enables a prospect to get hands-on with the product with zero initial commitment. A prospect can explore your solution and extract the value of your unique offering with essentially no risk. Given the opportunity, prospects will choose the free option 10 times out of 10. Deal-seekers may abuse this offering by signing up for multiple free tiers or pulling data and resources from the solution during the trial period therefor eliminating the need to move forward with the paid agreement.

A product-led strategy does not have to mean a freemium strategy!

Avoiding Freemium All Together

As seen, freemium can be timely, expensive, and does not always lead to the conversion you desire. Moving upmarket to higher contract values and deal sizes, freemium is often a non-starter. However, even at the largest enterprises, modern buyers want to avoid the dreaded sales call and get in front of the product sooner.

The good news is that alternatives do exist! These alternatives can help showcase your product and working functionality but do not have the same associated costs.

A Product Video

A product video tour offers a quick insight into the product offering that can easily be shared across a variety of outlets and marketing channels. A product video is a brief overview for a prospect to watch, but unlike a trial or hands-on evaluation, the prospect is not able to experience the solution.

An Opt-Out Period

Like a trial, an opt-out is a time based evaluation period where a customer has the right to cancel their subscription to the service if it does not meet their business needs. However, unlike a free trial, the opt-out requires a real financial commitment prior to commencing operations.

A Lightweight Experiential Demo

An experiential demo is intended to provide a lightweight introduction to the platform to get the prospect hands on with the solution without the associated time costs of a full trial. Experiential demos are scoped product overviews that a prospect can explore on their own time to better evaluate the solution. These self-guided walkthroughs enable the prospect to explore the solution on their own without the need for extended onboarding and customer support.

These solutions help you share your product without the associated costs of a time-based trial or freemium tier. Product led is a journey not a one fix solution. Enable your prospects to explore your product and get buyers to that crucial "wow moment" faster.


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I sat down with the Demo Doctor, Chris White, founder of TechSalesAdvisors. With over 30 years...
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