This post is by Tomasz Tunguz from Tomasz Tunguz
Click here to view on the original site: Original Post
A founder posed me a question earlier this week: Do you have any data/perspective on whether it’s worth keeping the unassisted free trial flow vs. providing only one path which leads to a demo and an assisted free trial? This is a complex question. Let’s break it down.
The unassisted free trial has benefits. There’s a deeper discussion in this post: Confessions of a Perpetual Freeloader.
- You capture the buyer at the point of maximum intent and reduces the activation energy of the sale.
- You broaden the universe of people who try the product. You educate the market on your product.
- You establish longer term relationships with customers since they can engage with the brand and product earlier on in their journey.
- You create barriers to entry by reducing the cost of customer acquisition and inhibit newer competitors who might disrupt using this acquisition strategy.
There are also costs.
- Unassisted trial accounts are likely to be smaller.
- Many more prospects will email customer support, which can be expensive.
- It requires a more mature product. Salespeople can gloss over faults and holes in the product during a demo. A solo user is bound to find bugs and rough edges and that can damage your brand. A brand is the sum total of all the interactions a customer has with your company.
- It may also require dividing the product roadmap because you might serve two different customer segments. The SMBs might prefer unassisted conversion and the enterprise assisted. This has some downstream effects.*
Where do startups run into trouble? When the unassisted and the assisted flows target the same customer base and price point. Salespeople spend time with small accounts which challenge the unit economics and quota attainment. And very large customers don’t get the attention they warrant.
To be able to sustain both paths, your company and product should be able to create a fork in the road to divide customers. You should have a pricing plan that clearly separates the customers that will close by themselves at a lower price from those that will pay more but ask/require sales help.
How do you create this fork in the road? Some ask customers to identify which type of customer they are and they are treated differently. Others use lead scoring or enrichment technologies to suss out which flow a customer should pursue. Others may create different landing pages and flows to segment the customer base. And of course, you could treat everyone the same and wait until you get a call from a big customer who wants to buy a broader license: the flywheel model.
To summarize, running both strategies is better, but it’s more work. The key to managing that complexity is having a team that can serve both customers, that can segment the customers well, and a pricing model that makes the unit economics work.
This is a complex topic and I’ve tried to generalize to simplify it. I’m sure I’m overlooking some important facets. If you have another perspective, please write or tweet. I’d love to hear it.
*Unassisted free trial creates PQLs (product qualified leads) and assisted free trials create MQLs or SQLs (marketing or sales qualified leads). These differences are important because they require differences in focus.
To create a successful PQL conversion process, product and engineering and growth marketing work together to optimize a conversion funnel. Prospects move down the conversion funnel by using the product and by receiving emails or in product alerts to educate. On the other hand, to create a successful MQL/SQL funnel requires marketing support, sales execution and customer success.