Free-to-paid conversion at scale
The gist: smart trials at Coefficient
Welcome back to the fourth edition of The Gist by Growth Unhinged!
The Gist is my attempt to get to the point — highlighting concrete ways to grow faster 🚀 and do more with less 🤑. It’s a break from my regular long-form newsletter, delivered during Growth Unhinged off-weeks. You can catch up on the first three editions here:
PLG companies are constantly thinking about how to deliver value before they capture it. Coefficient takes an unconventional approach with what you could call a smart trial, pairing smart automation with a human sales touch.
Let’s dive in 👇
Consider a smart trial - pairing smart automation with a human sales touch — to drive free-to-paid conversion at scale.
Why you should care
There’s an incredible amount of data about the benefits of personalization in B2C buying. I suspect we’ll start to see more of these B2C practices come to B2B software, and specifically PLG products.
HubSpot found that smart, personalized CTAs convert 202% better than basic ones
Accenture says that 91% of consumers are more likely to shop with brands who provide personalized offers and recommendations
Coefficient, the Google Sheets data connector, managed to close an $18 million Series A and land key accounts like Spotify and Miro with only one sales rep through a personalized and automated smart trial experience.
Tell me more
PLG companies need to deliver value before they capture it. Usually this means choosing between a freemium plan, a free trial, or – increasingly – a reverse trial (see: Airtable).
In freemium businesses, conversion rates average only 5% and it can be extremely inefficient (read: high CAC) for sales to play a role in free-to-paid conversion. This puts aspiring-PLG companies in a precarious position when they land free sign-ups from high-value accounts who could easily slip through the cracks of a fully self-serve experience.
Coefficient shows us a different option, the smart trial.
In Coefficient’s approach, new users get started for free with full access to all Pro features (similar to a reverse trial). Based on what the user has done in the product, they’ll receive a series of personalized outreach that guides them through the journey to conversion.
While this type of personalized automation isn’t new — we see many PLG companies leveraging trigger-based nurture emails to nudge users to reach their aha moment — Coefficient stands out for both the level of personalization and how far it applies across the user’s journey. Depending on user signals this could mean enforcing the trial time-limit with a countdown, extending the trial period (if the customer is eligible), or collecting data on why they’ve decided not to buy. The approach can even extend to a personalized message according to a user’s spreadsheet skill level, which predicts their familiarity with advanced product functionality or their need for Coefficient Templates.
Coefficient works to automate as much of the manual sales work as they can, and for good reason. “We want sales to do what they do best,” Coefficient COO Ben Crosswell told me. “It’s a more valuable use of our sales resources to spend time with high intent and high fit prospects.” Sales only reaches out to free accounts when they can provide value that extends beyond automation such as navigating a procurement process or helping develop a high value use case.
An approach like this requires a firm belief in the product’s value, a deep understanding of the pain you’re solving, and the patience & data insights to enable users to get to value without needing to talk to a salesperson (unless they want to, of course!).
Some additional things to consider when evaluating whether a smart trial is the right approach for you:
Are users consistently reaching their ‘aha moment’ via self-service? If not, focus on activation and time-to-value.
Do you have visibility into user signals across your new sign-ups such as firmographic info, user role, and in-product actions? If not, focus on data collection as a foundation to personalization.
Do you have a clear understanding of your ideal customer profile (ICP) and user personas? If not, make sure to define your target customer so that you can offer the right level of personalization.
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