How to Use Freemium Products to Gain Paying Customers | David Rostan, Revenue at Stonly; Ex-Calendly

How to Use Freemium Products to Gain Paying Customers | David Rostan, Revenue at Stonly; Ex-Calendly

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93% of B2B buyers say they’d rather buy directly from a website than a sales representative. But kicking off your product led strategy comes with a range of challenges: How much do you offer for free? How do you determine a pricing strategy? How do you decide when and how to follow up on PQLs?

On this episode of Product Led Revenue, host Breezy Beaumont talks with David Rostan, Head of Revenue and Co-founder of Stonly and former VP of Sales and Marketing at Calendly.

David talks about the importance of determining the value of a customer beyond a potential paying customer, how to layer in sales models to catch customers who would benefit from an upgrade, and why your customer should always be at the center of product-led growth.


💡 Name: David Rostan

💡 What he does: Co-Founder and Head of Revenue

💡 Company: Stonly

💡 Noteworthy: Before working at Stonly, David was the VP of Sales and Marketing at Calendly

Key Insights

🎙️ When you first start PLG, there will be some trial and error involved, and that’s okay.

When David was at Calendly, their PQL scoring took some trial and error to get right. They started with similar systems to what other businesses in their industry were doing and then built from there. “It wasn’t easy to build by any means, but once we had it, we were able to trial and error our way into the definitions that worked best. You called it something like Goldilocksing our way into it, and that’s really what we did, but we couldn’t even do that without a system to be able to see if it was too hard or too soft,” David says.

🎙️ When hiring for PLG sellers, it’s crucial to find the perfect person.

David says it all comes down to solutions sellers, not product sellers. “You've got to be a product and solutions expert and a customer pain point and jobs to be done expert, and then you bring those together. We're not necessarily looking for anything other than great salespeople. It's just a must-have. You can't phone it in; you’ve got to care about customers and product deeply,” he says.

🎙️ Regardless of the product, PQL, pricing, or sales models, people in the product-led growth world need to remember it’s all about the customer.

David says the key to success for his team is for everyone to understand who the customer is and what they are ultimately trying to achieve. “[You] absolutely have to know and find ways to know your customer and how your solution applies to them more and more every day,” he says.

Episode Highlights

💜 Virality matters in PLG - freemium models can be substantial growth drivers for your company

“The freemium model was a huge growth driver at Calendly. You can get a ton of value out of Calendly’s free product, which is great because you get value from scheduling meetings, and Calendly’s virality improves the more meetings you schedule. That was just a perfect alignment. Eventually, if you do see enough value, the right users hit paywalls, and they gladly pay for it by that time. So we spent a lot of time building out customer marketing to try to run people into those paywalls at the right times, with the right messaging and the right kind of value proposition.”

💜 Layer sales approaches over time as you master each one

“When I arrived [at Stonly], it was all inbound demo requests. Then the next thing we layered in was the PQL model. So if you were kind of flying under our radar, we were missing you, and because you were never reaching out to us, we started to reach out to you because we knew you, and we knew we could help you.

Then that final layer that we added and built out even more was that outbound [marketing]. [We’re starting] to recognize there are people who aren't yet coming to us and either trying us out or scheduling a demo, but we know if they did, we could make them successful. So we did start to build an outbound motion around target accounts.”

💜 Customer success will never replace sales and vice versa

“I don't think that customer success is going to eat sales because sales is just hugely important. And man, what a skill! You never know about a person until you try to take a dollar from them for your product, and they give you hesitation, and you can respond with an urgency, a real one, not like a made-up, ‘Oh, if you buy now, there's a discount.’ Not that, but an awareness of how important it is to solve these problems. That DNA is also equally important. I definitely think that one isn't merging into the other, but they're overlapping and cooperating and feeding off of each other.”

💜 Pricing can be a challenge, and it’s constantly evolving

“One thing that we did really well and have gotten right so far is usage-based pricing."

“Honestly, our first effort at bringing in substantial, real deliberate volume, we were wrong about what it would look like and how we would do it. So then we tried another thing and that worked, so we poured resources into that thing, which worked okay. So we had something going and said, that's working.
Now, can we double that? Can we triple that? Can we ten times that, and then the answer is, well, maybe triple it in a timeframe, but to grow ten times, we need new layers. And it's when you start to see those new layers that we need new layers of growth.
So now we're talking about going into the world of people who might not be bottoms-up but might be a little more top-down on a lot more having to sell the pain before you sell your solution. So that’s a point we're in right now: having the opportunity to layer in those other types [of sales motions]. So that's kind of how we felt it out, and there could easily be businesses whose answer is, ‘You know what? Now we're only doing the one, and we're going to be the best on the planet at the one.’
I think that's a legitimate growth strategy as well. We just saw an opportunity in our case to be good at several really key ones.”

Top Quotes

[14:45] “It's really smart for businesses who have some component like [Calendly] to think about how a customer can contribute value to our business, not just by giving us dollars, but by other things. So for Calendly, when you book a meeting, you win, and Calendly wins because another person definitionally has now heard about it.”

[16:19] “By using our own platform to welcome, to onboard, to guide, to support users throughout their journey [using Stonly], we not only make them more successful [at using the product], but we have the added advantage of getting to show off our own product.”

[26:53] “When people think about pricing, they study a lot of different things: willingness to pay, which things make people go from one tier to the other. So we will continue to evolve our pricing and packaging structure, particularly opening up more higher-end plans, because we find that we can deliver just a tremendous amount of value to a lot of customer types, but our pricing doesn't always scale to reflect that.”

Interested in learning about how Correlated can help your PLG company uncover expansion and upsell opportunities?

Sales and revenue leaders at PLG companies, like yourself, are faced with unique challenges. Using tools like Correlated can help sales and marketing teams identify new accounts that are ready to convert, or can help to notify your team for expansion and upsell opportunities.

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