Freemium Summit East Google Apps Presentation
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Google uses a freemium model for its Google Apps suite. It has over 30 million active users, with over 3 million businesses and more than 3,000 new businesses signing up daily (1). Freemium allows Google to disrupt premium markets by offering a free basic version and upselling additional features (2). It provides leverage through free users for product support and marketing through network effects (3).
Freemium Summit East Google Apps Presentation
- 1. business freemium at scale Scott McMullan (@scottmcmullan) Freemium Summit East October 25th, 2010
- 2. Google Apps Overview How we go to market w/freemium What we've learned about freemium
- 3. Messaging & collaboration suite +
- 4. In a nutshell, this our freemium
- 5. Lots of customers, growing fast 30 Over 30M active users (10M are EDU) Over 3M businesses More than 3,000 new businesses each day 2008 2009 2010
- 6. Rough breakdown of the 30 Million "Millions" are paid Premier 10 Million are free EDU "The rest" are free Standard/Other
- 7. How we go to market: a) segments & sales teams
- 8. 5 Editions
- 10. 5 Sales teams
- 11. Channel sales too! Channel +SIs +VARs +VARs +VARs +VARs Sales
- 12. This is our freemium. Freemium Free Trial Channel +SIs +VARs +VARs +VARs +VARs Sales
- 13. How we go to market: a) segments & sales teams b) customer lifecycle
- 14. Send prospects to web site
- 15. EDUs self-select
- 16. Smaller prospects can select Standard
- 17. Goal: start a Premier trial (or contact sales)
- 18. Active selling done here (1) (3) (2) (4)
- 19. That's our go to market... What have we learned about freemium?
- 20. Focus on 3 topics 1. Why we like freemium 2. Freemium's impact on direct sales 3. Freemium's impact on channel/ecosystem, including 2 case studies
- 21. We like freemium because... entered mature, premium market --> help disrupt large addressable market --> upsell math works existing, free consumers --> product & support leverage our apps have network effects --> lower marketing costs students graduate --> bring expectations to work we know ads --> additional revenue stream broad product --> opportunity for differentiation, add-ons
- 22. Think "revenue layer cake" http://www.flickr.com/photos/jamieanne/4657851724/ CC-BY
- 23. Freemium: impact on direct sales 3 Sales Teams -------------------- Field sales: > 3k users Telesales: 100 - 3k users Online sales: 1 - 100 users Freemium works because... user cap on free --> limits conflict with sales teams big diverse customer base --> more oppty to sell add-ons self-service DNA --> pilots are easier/cheaper A challenge online sales team competes with free
- 24. 1. Revenue layer cake Think "use as directed for best results" FREEMIUM: Small biz & EDU only http://www.flickr.com/photos/rapo/2373988909 CC-BY
- 25. Freemium: impact on ecosystem VARs Apps Marketplace ------------ --------------------------- 20% discount to VAR 20% revshare to Google Freemium works because... larger customer base --> more "air cover" --> grows appetite for consulting, apps more cloud-savvy user --> better conversion rates A challenge $50/user/year --> pressure on ecosystem prices
- 26. 1. Revenue layer cake 2. Use as directed for best results Think "helps build multiple channels"
- 27. 2 ecosystem case studies from Apps Marketplace
- 28. Smartsheet.com 3X better paid conversion rates than pay per click Cloud-savvy users easier to sell/support
- 29. 際際滷rocket.com 2.5X better paid conversion rates from trial 5X increase in seats/company
- 30. 1. Create a revenue layer cake 2. Use as directed for best results 3. Helps build multiple channels Think "You'll find new ways to use it"
- 31. Summary: freemium helped us scale 1. Create a revenue layer cake (core, add-ons, ads, ecosystem) 2. Use as directed for best results (right size, right segment) 3. Helps build multiple channels (sales teams, vars, isvs) 4. You'll find new ways to use it (awareness, preferences, ecosystem)