Acquisition Funnel Impacts - Free or Trial Feature?
Should our new feature launch as a free-to-use or gated trial feature? And let me also tell you why I think platform services, APIs, and SDKs on usage contracts are a mistake.
For features: The answer is when in doubt give it for free. But it's complicated. Understanding the metrics of customers in a typical product-led model is important.
Most A/B experiment setups will miss long-term value capture and are great at looking at short-term metrics.
This is usually not a problem as long as you have clear winners. It's important to understand though that for any change in your product there are primary and secondary effects to users.
Recommendation loops and retention are usually hard to measure (or put an actual value on) but they provide real value.
If you gate your feature behind a trial you might severely impact your recommendation loops.
In the illustration, you can see the detailed, expected effects. There might be external factors that limit you whether you *can* offer a feature for free. Because you are offering a service that's on a usage-based limitation yourself.
This leads to an interesting problem: if you offer API / SDK services based on usage you discourage product-led growth models for whoever is licensing it.
I don't hear this being talked about a lot but it's a consideration for any platform service. Flat services that are tied to revenue might be the better way here.
#plg #productled #productmanagement
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