SaaSFest Conference December 2016

CONFIDENTIAL AND PROPRIETARY

Lessons learned along Insightly’s journey to model its freemium business

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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

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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

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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