Being product led requires a shift in how the product team thinks about the product journey. Instead of viewing the product as the thing your company sells, you should view the product as the vehicle for delivering the entire customer experience—from acquisition and onboarding to support, renewal, and expansion. This raises the stakes for product teams to create the best possible experience at every stage, starting with a user’s very first impression of the product.
The best product-led companies don’t leave this first experience up to chance. Instead, they build a free version of their product—one that’s easy to use, demonstrates value, and, most importantly, makes the upgrade process as frictionless as possible.
What is product-led growth?
Product-led growth is a business strategy that places a company’s software at the center of the buying journey, relying on the product itself to do much of the “selling.” While companies that leverage product-led growth strategies still usually have sales and marketing teams, they shift some of that work onto the product to drive growth. This increases efficiency by freeing up internal resources, facilitating viral exposure, capturing trial users, and creating a clear path to paid conversions right inside the product.
Free products are one tool for driving product-led growth, and they play a large role in a product-led organization’s overall strategy. They let users try out the product before they purchase it, giving them the chance to see the product’s value and experience how it can solve their problems. Although free products are common in B2C software (e.g. Spotify, Amazon, and Evernote), many B2B companies are starting to build free versions of their software as they become more product led.
The different types of “free”
For product-led companies, building awareness for the product starts by engaging users through the product, and there are multiple ways to go about it. Here are three types of free product offerings:
A freemium product gives users access to part of the product for an unlimited amount of time. It doesn’t include the product’s entire feature set or functionality, but instead aims to offer enough to demonstrate the product’s value while still leaving the user wanting more. When it comes to deciding what’s included in your freemium product, there are a few different ways to approach the limitations:
- Limited functionality: In this scenario, users only have access to certain elements of the product. Companies often choose to offer the foundational components of their product for free, saving more advanced (and valuable) functionality as a reason to upgrade.
- Usage quotas: One example of a usage quota is to limit usage by the number of monthly users allowed to access the product. This model works best when there isn’t a direct alternative that users could turn to instead.
- Limited support: Another way to limit access is through your support offerings. Freemium users may only be able to utilize self-service support options, while paying customers receive a customer success manager (CSM) and access to a certain number of hours from your professional services or training team.
One of the biggest benefits of freemium products is that they put less pressure on your users by allowing them to experience your product and see its value so that they feel primed and more inclined to purchase the paid version when it makes sense for their business. A user might not need your product’s full functionality when they first sign up for freemium, but as their company grows and their needs evolve, your product can offer solutions without requiring them to switch to an entirely new option.
Free trials let users experience a product’s entire functionality for free, but for a limited period of time. This time limit helps create a sense of urgency, subtly encouraging users to convert to paying customers so that they don’t lose the value they’ve experienced during the trial period. This means, though, that it’s crucial for users to derive value during this limited time frame. The power of a free trial isn’t necessarily that it’s free of cost—it’s that when it works, it encourages active, long-term usage of the product.
When determining whether or not to offer a free trial of your product, it’s helpful to think about some key pros and cons:
Benefits of a free trial:
- Users may be more likely to convert since they were able to experience the entire product and its full functionality
- It doesn’t require you to support users who aren’t generating revenue for your business—once the trial ends, they either purchase the product or stop using it
- If they convert to paying customers, free trial users are likely to be highly engaged since they have already found value in and are familiar with the product
Reasons to skip a free trial:
- Some applications require longer usage before users see value, so a free trial might not last long enough to foster that experience
- Your product could be too complicated for a trial, for example if complex configurations can’t be set up during a trial period without proper training
- If users come to your product to complete a single task periodically (e.g. once a year or month), it probably doesn’t make sense to give it away in a free trial
The Citrix ShareFile team used analytics and in-app guides to personalize onboarding for free users, increase engagement, and boost trial conversions.See how ->
A product tour offers prospective customers a guided walkthrough of your product, accessible at any time. This experience is more restrictive than the previous two types of free product offerings, as it’s limited to the functionality that the tour showcases. On the other hand, product tours are an effective way to expose people to your product without asking for any sort of commitment.
One way to remedy the limitations of product tours is to create multiple tours that each focus on a different area or functionality in your product. People can choose the tour(s) that are most interesting or relevant to them, and you can demonstrate more product capabilities without overwhelming visitors in a single experience. If you already have a freemium product or free trial, product tours are also useful in upselling those users by exposing them to additional parts of the product.
If you’re building a product tour, keep these three tips in mind:
- Design your tour to showcase a logical workflow in your product, rather than jumping from feature to feature in no clear order
- Keep any text as concise as possible, clearly articulating the steps of the tour without distracting or adding confusion
- Provide a clear next step at the end of the tour—whether it’s another tour, more resources about your product, or a way to contact your sales team
How to do free right
As your product team works to create the best possible experience for free users, here are four best practices to help guide your efforts:
1. Set clear expectations
No matter which type (or types) of free product you choose to offer, it’s important to be clear about what users can expect from the experience. If it’s a freemium product, make sure you lay out what the limitations are and what users will be able to do. Similarly for a free trial, the last thing you want is a user getting frustrated because the trial ended sooner than they thought and they didn’t get a chance to utilize a certain feature or product area. And for product tours, it’s helpful to include a short description at the beginning of the tour so users know what they’re getting themselves into.
2. Create thoughtful in-app onboarding
Onboarding is a critical moment in any user’s product journey, but it’s particularly important for free trial and free product users. As mentioned previously, the goal of these experiences is for users to understand the value of your product to the point that they are willing (and eager) to pay for its full functionality. This means onboarding plays an outsized role in making sure free and trial users realize value quickly—and feel comfortable and confident in the product.
Spend time creating in-app onboarding flows that welcome and guide free users through the key features they should know about right away. If you’re able, build out flows that are tailored to different users’ needs—for example based on their role, admin level, or the reason they signed up for the trial or product in the first place. By delivering onboarding in-app, you’ll be able to offer guidance while users navigate the product, helping to ensure they don’t get stuck or are left confused about how your product can help solve their problems.
3. Lean on product usage data
Product analytics can help you at nearly every stage of building and managing a free product. When setting your freemium product’s usage threshold, first turn to product usage data from your paid product to identify average usage patterns. For example, if your average customer creates four dashboards in your app per month, you can set the threshold at two dashboards, and require free users to upgrade if they want to create any more.
It’s also valuable to measure product usage for your freemium and free trial experiences. Similar to marketing qualified leads (MQLs), you can create a framework for product qualified leads (PQLs), which are leads that are scored based on engagement with the product. Your sales team can then use this data to target their outreach and identify which users are the most engaged—and therefore the most likely to be interested in the full paid platform.
Want to learn how to uncover key usage trends in your product? Take a self-guided tour of Pendo.Take a tour ->
4. Make it easy to upgrade
In the spirit of product-led growth, your free product should have the ability to upgrade or purchase built right in. For a freemium product, think about how you can offer upgrade options at natural points in users’ workflows—like when they are about to reach their limit for a particular amount of usage. You can also leverage in-app guides to notify users about an upgrade option that they might not be aware of, or steer free trial users to the features you know correlate with conversions to the paid product.