SaaSFest Conference December 2016 CONFIDENTIAL AND PROPRIETARY Lessons learned along Insightly’s journey to model its freemium business
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SaaSFest Conference December 2016
CONFIDENTIAL AND PROPRIETARY
Lessons learned along Insightly’s journey to model its freemium business
2
Lessons learned a long Ins ight ly ’s journey to model i t s f reemium bus iness
1 • About us • Founding story • Our journey thus far
2 • SaaS self service model • Understanding retention • Cohorts and their components
3 • Layering on Freemium • Unit Economics • Q&A
3
S a a S F e s t 2 0 1 6
CRM AND PROJECT MANAGEMENT
FOR SMBs
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One of the largest CRM and Project Management appl icat ions in the wor ld for SMB’s
1.2MUSERS
100 EMPLOYEES
6LANGUAGES
+150COUNTRIES
5
Site Visitors
Accounts Provisioned
New Paid Customers
How does a t rad i t iona l se l f serve model work?
$ Branding
$ SEM
$ Display
$ Marketplace
$ SEO/ Content
Marketing
Paid Marketing Acquisition
1000 Unique website visits per month
50Visitors complete the call to action and register for a trial account
5Convert into a paid customers, which collectively as a cohort, generate a new mrr stream for your business
In any given month …
Dollar retention of your new cohort
You’ve worked hard to acquire this new recurring revenue stream, naturally, you want to understand how well you retain it over the course of its life for this group, or, ‘cohort’ of customers!
Traditional components of cohort analysis
Monthly Gross Dollar Churn
Monthly Net Expansion
Annual Gross Dollar Churn
Annual Net Expansion
Gross $MRR churn – monthly contracts
Analyze gross dollar churn over a cohort’s life for patterns as a cohort matures
Net $MRR expansion – monthly contracts
Net MRR expansion = upgrades – downgrades (both plan and seat changes)
Net $MRR churn – monthly contracts
Net MRR churn = Gross MRR churn – Net expansion MRR
The quest for ‘net negative churn’ awaits you. Focus on the relationship between each component of retention across segments in cohorts and work the equation from both sides
Net $MRR churn – annual contracts
At the end of twelve months, this segment retained almost 20% more of it’s beginning revenue stream. Programs that help influence contract mix should drive churn reduction.
You should factor delinquent based churn on auto – renewal attempts into your calculation (month 13), being careful not to overstate renewal rates
Lessons lea r ned a long Ins igh t l y ’s jou r ney to mode l i t s f reemium bus iness
Site Visits / Accounts Provisioned
New Customers
FREE Customers
The F reemium Se l f – Serve SaaS mode l
$ Branding
$ SEM
$ Display
$ Marketplace
$ SEO/ Content
Marketing
Paid Marketing Acquisition
1000Unique website visits per month
150Visitors complete the calls to action and register either for a free or a trial account, forming this period’s cohort together
10Convert into new paid customers and generate a new $MRR stream
140New free accounts provisioned – if a customer completes their trial period and chooses not to purchase, their account is converted into a free instance
In any given month …
Customer retention in a Freemium Cohort
$MRR retention in a Freemium Cohort
Lifecycle conversion in a Freemium Cohort
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Know your funnel deeply, ta i lor your measurement f ramework to your bus iness
SAASFEST, THANK YOU! DEC 2016
CONFIDENTIAL AND PROPRIETARY
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