Over at For Entrepreneurs, David Skok (VC at Matrix Partners) shared a slide deck he presented at the Boston Lean Startup Circle on Building a Sales & Marketing machine.
The presentation covered:
What was most interesting for me was thinking about David’s presentation in light of a recent free trial of some SaaS software I just completed. Actually, I didn’t just complete it – I endured it.
But first to David’s points. Note: the deck is 124 slides deep – so I thought I might pick out a few and share my thoughts.
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Free Trials require different Product Thinking
David spends a bit of time on B2B “low cost acquisition models” including “touch-less conversion. ” As examples, he shares ZenDesk, FreshBooks & 37signals. This slide really caught my attention:
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The lesson seems to be that, at least in the SaaS / sub-$200-a-month space, winning through free trials is about a great product (and trial experience) versus a great sales process.
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Levers you can use to balance acquisition costs & profits
David also discusses customer acquisition cost (CAC) as it relates to sales complexity (expressed by sales resources applied):
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He presents that “clearly adding the Human Touch dramatically increases costs” resulting in an imbalance between customer acquisition costs and profit from those customers (aka Lifetime Value or LTV).
I found the “levers” for re-balancing to be very interesting (Red to Green – meaning from CAC greater than LTV to CAC less than LTV):
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David's points really made sense to me. The customer experience in a trial situation is all about the product. When you make it all about the sales process you are making a huge mistake. See my experience below…
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The trial from Dante’s 9th Circle (Treachery)
I’ll keep the company’s name out of it – but I think there are some lessons to be learned from how one company’s sales process went awry.
The call to action and landing page seemed simple enough “Free Trial Offer”. The reality was anything but.
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What I was offered |
What I received |
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A free trial to address an issue I had actually been thinking about |
A severe stalking by one of the most aggressive Sales Reps I have ever encountered. |
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A welcome email, a web portal & log in credentials |
The requirement of a Sales conversation blocking me at every stage of the trial |
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What I expected |
What I received |
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A self-service experience |
Multiple contacts (Sales Rep & Sales Engineer) and numerous conversations |
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A chance to evaluate the value I received through the trial |
The hard sell time & time again |
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So, where did they stray?
Looking back, my advice would be you shouldn’t fake a SaaS/freemium trial. For better or worse, we have come to expect certain things from a web trial. That doesn’t generally involve a Sales Rep withholding your trial username & password until you spill your guts on BANT.
Now, not every company can replicate the ease of signing up for Gmail, LinkedIn, etc. That isn’t a requirement for B2B success. But don’t frame your trial in that language and then drive prospects through a highly complicated sales process before they get any benefits/results.
The argument I’m making isn’t that every company can, or even should, swear allegiance to the framework of David’s sales & marketing machine. But they shouldn’t adopt the shell without building an underlying "machine" to match it.
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So what do you think? What are some of the best trial experiences you have had and why? What have been some of the worst and why? No naming names here but let’s share and learn from each other.