Date post: | 02-Jul-2015 |
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Business |
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Consumerization of the Enterprise
• “The emergence of consumer markets as the primary driver of information technology innovation is seen as a major IT industry shift, as large business and government organizations dominated the early decades of computer usage and development.” Wikipedia
• “But while this trend may be true when it comes to the technology itself, the differences in business models and go-to-market strategies seems more distinct than ever.” Ben Thompson, 2013
Bring Your Own Apps (BYOA)
• First, users became more comfortable using their personal devices for work email.
• Mobile app, web app, and desktop app adoption exploded.
• Users have become comfortable using these apps for work.
• Enterprise freemium is a business model built for BYOA.
Contrasting business models
• Boxed software sales (traditional)
• Time-limited trials
• Consumer freemium => enterprise
– Gmail/Google Docs => Google Apps
– Dropbox => Dropbox for Business
– Evernote => Evernote for Business
Who does enterprise freemium benefit?
• Users - they can adopt the product and start using it right away without any obstacles.
• Customers - they know a product is getting adoption so they know it’s a worthwhile investment.
• Vendor - it can use modern methodologies to prove out ideas and grow.
The rest of the process
• Implementation
• Validation
• Migration
• Internal launch event
• Training
• Don’t forget to deliver on those sales commitments!
Most Importantly: Pray for Adoption
Coffee Cup Takeaways
• Current process rewards complex checkbox products.
• Complex products are usually unusable for end users => users don’t like them.
• Users rebel and use consumer alternatives => hurts adoption for selected product.
The freemium acquisition process
• Users and teams adopt the products that they want to use without involving IT or other stakeholders.
• When a product gains adoption, the users or company upgrades it as necessary.
• Bonus: Users feel empowered because autonomy kind of has that effect.
The role of IT
• Product Selection
– Enterprise freemium reduces their role in this.
• Security
– Here be dragons.
• Supportability
– Worst case scenario: more products to support, but they are easier to support than complex alternatives.
Advantages for the product
• Get into organizations where there is an entrenched competitor.
• Get into organizations where enterprise buyers are skeptical about the product.
Unfair advantagesB
uye
rs c
are
Users care
High
Low
HighLow
Checkbox features
Analyst attention
User adoption
Press
Existing relationships
Cost
Security
Tactics for enterprise freemium
• Sign up flow
• New user onboarding
• Virality and social proof
• Reengagement tactics
Build the right signup flow
• Ask users to sign up with their work account.
• Don’t blindly minimize friction – require some investment by the user.
• Introduce concepts from your product.
• Borrow heavily from consumer product patterns.
• Useful: http://www.useronboard.com/
Freemium revenue
Economics of Freemium, Peter Fishman, 2014
Data Informed Methodology
• Choose a metric to try to improve – success will result in more revenue.
• Opens the door for data-informed product management:
– Clear feature goals
– Defer non-impactful features
– A/B testing to measure success
How engagement becomes revenue
• Sell to small teams – credit card upgrades
• Sell to the whole company – traditional sales cycle
– Takes longer, but deals will be bigger.
– “56% of respondents indicated that either the CIO/top IT executive or the IT department were the primary leader in driving change through the consumerization of IT at their organizations.” Reference
Using your unfair advantage
• Your signed up users have voluntarily shared their contact information with you, transforming them into free leads – find executives to reach out to.
• Some users have already adopted the product with no help from IT – find champions by looking at usage activity.
Objection handling
• “Your product is not secure.”
– 90% of enterprises say that the use of consumer services used for work is pervasive today.
– 41% of these sites are used without IT approval.
• “We already have a product that does <x>.”
• “We don’t have the resources to support your product.”
source of metrics
Common sales requests
• “Can we do a Proof of Concept? It’s part of our acquisition policy. Also, we need to block all users from using your product until the POC users have finished evaluating it.”
• “Can we turn off <feature x> for our users? They already have that feature in a different product that we’ve invested significantly in.”
• “Now that we’ve purchased the product, can we turn off invites? IT can handle onboarding all the users.”
Should you offer freemium?
• Adoptability
– Easy to use with no formal training?
– Doesn’t require IT to set it up?
• Network effects
– Helps make it more likely that the product will gain adoption.
Thanks for coming!
• Neil McCarthy, @hardkornelius
• Christina Fan, @cfanimal
• Related resources
– The Economics of Freemium, by Peter Fishman
– New Sales Models, by David Sacks
– Testing Yammer’s Signup Flow, by Neil McCarthy