The inside story of Amplitude’s new self-service plan
Head of Growth Marketing Franciska Dethlefsen takes us behind the scenes
👋 Hi, it’s Kyle Poyar and welcome to Growth Unhinged, my weekly newsletter exploring the hidden playbooks behind the fastest-growing startups. This time we’re getting the inside story of how Amplitude (AMPL) introduced self-service.
“The numbers said not to do it. We did it anyway,” Franciska Dethlefsen told me.
Franciska was reflecting on Amplitude’s two-year journey to test, launch and scale their self-service plan – and do so as a newly public company (AMPL). She had joined Amplitude, the digital analytics software company founded in 2012, through its acquisition of Iteratively where she was the Head of Growth. Today she leads all things growth marketing, a team of roughly 15 people across four different pods (acquisition, retention, monetization and community).
Amplitude tested a self-serve alpha in August 2022 – that’s over a year before the eventual public launch in October 2023. A disappointing 14 customers purchased the original self-serve plan during the five months of alpha testing.
But the team persisted. And the (early) results are impressive. Before self-service, Amplitude converted 0.1% of free accounts to paying customers. That figure is now “getting close to 2%” – a 10x improvement in conversion (and not far from B2B freemium self-serve benchmarks of 3-5%).
I invited Franciska to Growth Unhinged to share the inside story of self-service at Amplitude. She spoke openly about the challenges and learnings, reflecting on topics like internal expectations setting, preventing sales cannibalization, getting pricing & packaging right and being newly accountable for churn. Let’s get into it.
From idea to public launch… in almost two years
While self-service was new to Amplitude, product-led growth (PLG) was certainly not. Franciska says that Amplitude started as an early product-led company with a generous free plan as well as a self-serve channel.
The company started to realize how much revenue there was to be made by going after larger and larger enterprises. “With that, we swung the pendulum all the way toward the sales-led side,” Franciska reflected. “We removed the self-serve tier but luckily kept the free plan alive.”
In early 2022, Amplitude started looking into its free plan again. Amplitude put additional resources toward bringing more users into it, improving activation rates and monetizing that customer base. At the time, monetizing free accounts meant a product-led sales motion where they’d mine the free plan for potential accounts that would pay and then hand those off to sales with the relevant data and insights.
While there were some wins, there was a glaring challenge with this approach. Going from spending $0 to upwards of $40-50,000 per year was too big of a gap for the average free user.
At the same time, Franciska acknowledged that competitors had compelling offers for the lower end of the market. “It was hard for us to stay competitive in that space,” she told me. “Amplitude in the market was seen as expensive and price intransparent.” Customers wanted more transparency to know how much they would need to pay both initially and as they grew.
The team began testing lowering the price floor to compete for these deals. Increasingly, that meant having highly trained people selling $10-15,000 deals, which was both resource-intensive and expensive. “We had conviction that the product could carry that load in the lower end.”
Growth marketing and product growth were starting to get conviction about self-serve. Now they needed to pitch the opportunity to leadership. They started having conversations in January 2022. “At this point, it was a lot of building business cases, showing what competitors were doing, creating financial models and making exec slides,” Franciska recalled.
“There was a lot of angst from the sales team,” she said. “We had to exclude a lot of accounts that sales were either talking to or thinking of talking to in the future. We weren’t allowed to talk about it or send emails about it. It was an MVP experiment where for it to be a wild success would have been almost impossible.”
The results came in. There were only 14 purchases of this self-serve plan over the course of five months. The team still took this result in stride and kept pushing for a broader rollout. “The critical part we showed was that Amplitude could sell this plan without a human involved in the process. That was enough to get to the next phase and keep testing.”
They launched the beta in January 2023 to all free users. Still, there was no marketing around self-serve and very limited monetization awareness. They saw an uptick with some early signs of the success they wanted. In fact, they almost launched publicly in April 2023, then pulled back.
“We didn’t have enough conviction in the plan itself,” Franciska remembered.
Meanwhile, Amplitude was fundamentally changing how to position the product, moving toward a ‘platform’ positioning. This meant rethinking pricing and packaging yet again.
Amplitude finally launched self-serve in October 2023, nearly two years after the team began working on it. They didn’t see a huge amount of customers buying during launch week, but it’s been steadily improving since then. “The launch itself was kind of flat, but over time those numbers kept increasing as we got more signups into the product and had more customers aware of it.”
The metrics have been (very) encouraging. Free-to-paid conversion rate is getting close to 2%, not far from the benchmarks. This is up 10x from the prior free account conversion. And it hasn’t had a negative impact on Amplitude’s commercial and enterprise sales teams. If anything, it’s already showing signs of having a benefit to sales by bringing them customers who are already used to paying and are growing fast.
Franciska reflected on five major learnings from Amplitude’s self-service journey.
Learning #1: Moving forward even when the numbers say not to do it
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