Please Make it Easier!

By Jim Tholen, Managing Partner

Over the past ten years, there has been a seismic push away from physical infrastructure and purpose-built hardware to cloud-based computing. This push paved the way for a new type of software licensing and delivery model known as Software-as-a-Service (SaaS). Today, SaaS offerings have become a standard delivery model for many business applications, making it easy for workers to access their favorite business tools from a web browser or mobile app. Common SaaS offerings include collaboration tools, customer relationship management, enterprise resource planning, accounting, invoicing, and more. The advent of SaaS offerings has revolutionized business models, customer journey dynamics, and investor interest and valuation.

However, companies often struggle with the best way to enable prospective customers to test and purchase their offerings. This usually leaves startups with more questions than answers. Specifically, how can we make it easier for customers to understand what we offer, the problems we solve, and if the solution works in their organization?

To help answer these questions, we’ll dive into a few popular themes of the new SaaS-driven world, including the freemium vs. free trial model, how to best enable customers to buy your product, and common back-office implications.

The Test Battle: Freemium vs. Free Trial

Today, a potential customer will identify a problem and begin their search for a solution — often online. Once the prospect finds your businesses’ website and understands how your offering could help solve their problem, the next question to follow is generally, “how do I try it?”

This is an interesting question in the digital age. At its core, you need to make a product decision. Do you offer a slimmed-down freemium version of the software that enables the customer to use basic features and test it in their business environment for as long as they want? Or do you offer a free trial period that enables the customer to play with the full product for a limited time before requiring them to buy?

In either model, the hope is that the customer enjoys the product enough to pay for the full service. Both options can work depending on your target customers and solution, so let’s look at each option in more detail.

The freemium model poses interesting questions about how feature-rich to make your offering. What features are essential for customers to test drive? What are the key features customers will want? What features do you want to charge for?

Too many features and you’re giving your product away for free. Not enough features and you could turn away customers by not showcasing the true value of your solution. There is a lot of art and science (and perhaps experimentation) in this model. We have seen freemium models work with limitations on various leverage points, such as key features, numbers of users, or usage level. One interesting nuance in the freemium model is providing an open-source slimmed-down version to try to drive your base product’s viral usage.

For the free trial model, the upside and downside are enabling full use of the product. For the most part, interested buyers like the ability to thoroughly test a product before making a purchase. This option allows customers to get a full sense of your offering. However, if the implementation complexity and learning curve are high, customers might time out of their free trial before unlocking the product’s full value. If this happens, you failed at making it easy for a customer to test your offering. As you can see, ease of use and self-training are critical for this model.

Getting Your Customers to Purchase

Once you’ve decided on your test model, your next step is to figure out how to make the buying process simple and compelling. One clear advantage of the free trial is that at the end of the trial period, you are forcing a purchase decision. However, both models need to address the following questions so there is no confusion with your customers:

• What is the value proposition of purchasing the full product? Outlining the benefits from the free trial or showcasing the enhanced features on the full version is essential.
• What is the pricing? This is where many companies struggle. Pricing needs to be simple and easy to understand, with an emphasis on transparency. While publishing pricing may reduce some ability to manage pricing by customers, you will win on ease of interaction.
• How does a customer buy digitally? Laying out a customer journey and clear instructions on how to access your SaaS offering is vital.
• How does a customer renew, expand, or upgrade? Highlighting the different levels of your offering with specific pricing and contracts will help ease confusion for your customer and create upsell opportunities in the future.

Back Office Implications

Following all these instructions is often easier said than done. And creating a seamless customer experience can be challenging for a B2B company from an infrastructure and back-office perspective. That’s why the overarching mantra for every SaaS companies’ customer journey should be “self-service.” Once you’ve figured out your test model and successfully delivered on that strategy, you need to engineer (or, in some cases, re-engineer) your product delivery and customer purchase interaction to make the buying process seamless and nearly effortless. Answering some of the above questions will help, but it’s essential to test the steps a prospective customer would take to purchase your product and work to fill in barriers and gaps.

Pulling it All Together

This all sounds pretty straightforward at a high level, but I know Mike, Scott, and I struggled with getting our SaaS offerings right at BroadSoft. One of our learnings was from an experiment we ran with our German business unit. We sold a very (and I mean very) simple unified communications offering, made it nearly touchless, and experimented with what was in our freemium vs. paid model. This experience showed us the art of what’s possible in making the digital buyer’s journey a seamless experience. Interestingly, we aimed this offering at small and mid-sized businesses but found that large companies were very interested.

The moral of the story is that you need to start small, test, analyze, understand the feedback, and adapt. In today’s SaaS world, there’s no one size fits all playbook. So while this kind of transformation may appear daunting, our message is to have faith. The journey can be rewarding!