I was recently catching up with a great CEO who put the free edition of a popular product on hold. Usage was there, but revenue wasn’t tracking the usage growth. And it worked. By moving from Freemium to “Contact Me” only (albeit with transparent pricing), sales went way, way up. He got into conversations with top prospects, and got them to buy bigger, better editions. In fact, it worked really well. And they probably needed to do this, to get the revenue engine going.
My only advice was don’t leave the Long Tail shut off for too long.
So many sales leaders get frustrated with Free editions, very low-cost editions … and the Long Tail in general. The Long Tail:
- Distracts sales, with leads that never closes
- Overwhelms support, asking the vast majority of questions
- Often never really buys, as they often aren’t your top ICP / buyer
- Competes with sales’ desire for Urgency
- Competes with paid editions, and more expensive paid editions
All these objections from Sales to a Free edition, and a real Long Tail are valid. They all, this week, this month have some impact on sales and urgency. Adobe shut off our Free edition almost immediately after our acquisition, as they didn’t really want to deal with all the noise it created.
It’s just, the Long Tail has so much power. Super power, over many years.
Let’s take a few look at some public companies as examples:
- Asana: at $250m in ARR, 60% of their customers were still self-service, despite going more and more upmarket
- Box: even at $800m in ARR, 8% of their customers still come from self-serve and the Long Tail. Despite going more and more enterprise.
- MongoDB: even at almost $1B in ARR, almost 90% of their customers still came from self-serve. Yes, this is pretty much part of the COSS model. But it’s still a reminder of how far it can scale.
- Zendesk: At $1.6B, it still has 50,000 tiny customers of less than $1k — despite $1m+ customers being their growth engine. Yes, today Zendesk doesn’t really prioritize the tiniest customers. But it supports them.
- Expensify: at $140m+ ARR, 60% of their revenue came from employees using the free version on their own, for their own expenses, and then socializing it to their “boss”.
Now a Long Tail strategy generally needs to come hand-in-hand with a Free / Freemium strategy, and that isn’t for everyone. And almost all of us do have to drive up market to scale. It’s just so, so far to get really big without going at least a smidge upmarket.
No, the point is just this. Your Long Tail is an asset that lasts decades, if you invest. The results can’t always be perfectly quantified. And sales may not always love all the parts of the Long Tail.
But in the end, it’s the engine that keeps on giving. Don’t let it go. If you do — you may never get it back.
And a related post here:
long tail image from here