Join Tomasz Tunguz, Managing Director with Redpoint Ventures as he takes you through a quantitive analysis of 600 Freemium Soon companies.

1. TOP 10 LEARNINGS
ABOUT FREE TRIAL
TOMASZ TUNGUZ
Managing Director
Redpoint Ventures
@ttunguz

2. Tomasz Tunguz
Managing Director
Redpoint Ventures
@ttunguz
Top 10 learnings about free trial

5. The Survey

6. 590 Responses
24 Questions
1000+ Lines of
Code

7. 599
Respondents Across ARRs, ACVs, and Customers

8. Respondents Span Many Different Buyers
16% of Respondents Target Marketers

9. Goals

10. Contract
Length

11. Annual Contracts Most Common in MidMarket
80% of Respondents with $15-$50k ACV Use Annual Contracts Predominantly

12. Stick with
Annual
Contracts
1

13. Logo
Retention

14. Two Thirds Retain 80%+ of Logos; One Third Retain
90%+

15. Larger Customers Churn Less
45% of Respondents Targeting Enterprise Retain 90-100% of Customers/Logos

16. Strive for
90% Logo
Retention
2

17. Net Dollar
Retention

18. Top Quartile Expand Accounts by 120% or More

19. Enterprises Expand More than SMBs
34% of Respondents Targeting Enterprise Exhibit NDR of 100%-120%

20. NDR Target
Should be
100-140%
3

21. Trial Structure

22. Time-Based Free Trials Most Common
58% of Respondents with ACVS between $15k-$50k Use Time Limited Trials

23. Reason: Time & Limited Trials Convert Up to 2x
Better12% of Leads in Usage Limited Trials Convert to Paid

24. Explore Time
and Usage
Based Trials
4

25. Trial Length

26. 14 Day Trials Most Common; 30+ Days Second Most
47% of Respondents With Time Limited Trials Cap Trial Length at 14 Days

27. But Conversion Rate Same Across Trial Lengths
16% of Leads in 7 Day Trials Convert to Paid on Average

28. Trial Length
Doesn’t Alter
Conversion;
Shorten It
5

29. Salespeople

30. Have
Salespeople
Contact
Freemium
Leads
75%

31. For good reason: Salespeople increase conversion 3x
15% of Assisted Leads Convert to Customers for the Median Respondent

32. Sales Assistance Impact Evident at Every ACV
The Median Respondent with 15k-50k ACVs Converts Assisted Leads at 20%

33. Hire
Salespeople
to Call Your
Leads
6

34. Conversion

35. 50th Percentile of Respondents Report 4%
Unassisted Conversion
25th 50th 75th
1% 4% 12%

36. Aim for 4%+
Unassisted
Conversion
7

37. 50% of Respondents Report 15.5% Assisted
Conversion
25th 50th 75th
6.8% 15.5% 30%

38. Shoot for
15%+
Assisted
Conversion
8

39. Activity
Qualification

40. Activity Scoring Effectiveness Decreases with Price
4% of $50-$150k Leads Which Have Been Scored By Activity Convert to Paid

41. Question
Activity
Scoring in
Enterprise
9

42. Payment

43. of
Respondents
Require
Payment Info12%

44. But the Data Suggests Many More Should
On Average Unassisted Leads with Payment Collected Before Trial Convert at 10%

45. Test
Requiring
Payment at
Outset
10

46. Summary

47. Summary
1. Stick to Annual Contracts
2. Strive for 90% Logo Retention
3. Target 100-140% NDR
4. Prefer Time and Usage Based Trials
5. Shorten Trial Length

48. Summary
6. Hire Sales People to Call Leads
7. Aim for 5% Unassisted Conversion
8. Shoot for 15% Assisted Conversion
9. Question Activity Scoring in Enterprise
10. Test Requiring Payment

49. tomtunguz.com

50. APPENDIX
(If you need ’em)

51. 18.7 = 21.0
When does…?

52. 18.7 = 21.0
When does…?
No Difference in Conversion
Rates When Activity Scoring

53. True Across Buyers
71% of Respondents Targeting Customer Support Buyers Use Time Limited Trials

54. Buyers

55. Contract Length by Buyer - Same!

56. Net Dollar Retention by Buyer - Same!

57. All Buyers
Behave
Similarly
11

58. Time-Based Free Trials Most Common; Features and
Seats Increase with ACV

59. Time-Based Free Trials Most Common; Features and
Seats Increase with ACV

60. Terminology

61. Words to Know
Unassisted Conversion
Assisted Conversion

62. Reason: Time Limited Trials Convert Best (put in how
much better)

63. 50% of Respondents Report 5% Unassisted
Conversion

64. 50% of Respondents Report 15% Assisted Conversion

65. Net Dollar Retention by Buyer - Same!

66. Conversion Rates by Contract Length - Same!

67. Sales Impacts Conversion Rates Across Segments

68. THANK YOU