How to

How to build a free-to-paid conversion playbook

Learn the most common free-to-paid plays and a simple framework to build your own playbooks.

Stephen Moock

January 23, 2023
·
 min read

As a useful tool to accelerate self-serve revenue growth, Product-Led Sales playbooks are top of mind for every PLG sales leader. But building playbooks is no easy feat without a fine-tuned strategy in place. Chatting with playbook first-timers, we hear questions like:

  • What kinds of sales playbooks do most PLG folks use?
  • Is there a framework that playbooks should follow?
  • What would a free-to-paid conversion playbook look like?
  • Do we need any specific product or sales data?

In our recent how-to webinar, Free-to-Paid Conversion Playbook, we covered all these questions (and more!). Read on for a recap of what playbooks are, examples of free-to-paid conversion plays, and a simple framework you can use to build Product-Led Sales playbooks.

Breaking down the basics: Product-Led Sales playbooks

What is a Product-Led Sales playbook?

Product-Led Sales playbooks are step-by-step guides that level the playing field between sales reps, so to speak. Standardizing sales best practices into an easily consumable format, a playbook helps your least-tenured reps run deals using the same tactics as the most experienced ones. In this way, it helps Sales build repeatable, scalable success across the team, minimizing risks and keeping conversion rates high.

Rarely, if ever, are playbooks a one-size-fits-all use case. Most PLG companies build multiple playbooks to outline specific tactics and tools for different types of product qualified leads (PQLs) or accounts at different stages of their activation or adoption lifecycles. 

Who uses Product-Led Sales playbooks?

Sales reps use playbooks to understand the right steps to take for timely PQL follow-up. Playbooks set every rep up for repeatable success in high conversion and close rates. Sales leadership provides guidance about playbooks so that everyone is operating, selling, and running deals based on agreed-upon best practices. 

What are the most common Product-Led Sales playbooks?

Depending on your PQL conversion goals, there are any number of use cases a sales team might build a Product-Led Sales playbook for. The following are three common playbooks we see across the PLG space. 

  • Free-to-paid conversion playbook: The bread and butter of PLG, this playbook converts free users onto paid plans. It’s an easy first pick—most sales teams already have a motion in place with a need to standardize it across the company.
  • Upsell expansion playbook: With the unofficial motto of 2023 being “Do More With Less,” this playbook is another popular choice for Sales and GTM leaders. Upselling higher tiers and add-ons to happy customers is an efficient way to capture revenue. 
  • Enterprise account consolidation: This is favored by companies with significant spikes in user adoption and usage across different teams. It involves merging multiple workspaces or lower tier accounts into one centralized account on a large enterprise plan.

Building winning playbooks: Free-to-paid conversion

While there are countless ways to build a sales playbook for free-to-paid conversion, we recommend following these guidelines to expertly navigate the process.

1. First, start with a simple framework. 

Complicated is the enemy of execution. With this in mind, we recommend using the  “Signal → Messaging → Action”  framework to build out your playbook. Each of the three stages are defined below, and you’ll see what it looks like in action shortly. 

  • Signal: The user behavior that triggers your sales play
  • Messaging: How you want reps to think about the signal and communicate its value to the customer
  • Action: The steps or tactics reps should take to move the deal along 

2. Then, identify your top free-to-paid conversion scenarios

With this framework in place, identify the free-to-paid scenarios and user behaviors you want your reps to take action on. While user behavior varies across companies, we commonly see these three scenarios:

  • Scenario #1: Users who try premium functionality
  • Scenario #2: Users who hit usage caps
  • Scenario #3: Users approaching their seat limits

3. Now, begin mapping out your scenarios.

Sales plays in hand, you can start mapping them out using the “Signal → Messaging → Action” framework. To illustrate this framework in action, let’s map out the three free-to-paid conversation scenarios above.

Scenario #1: Users who try premium functionality

A common free-to-paid conversion scenario is when free-tier users show intent by experimenting with functionality that’s paywalled, behind a feature gate, or limited in some capacity. 

In this scenario, your playbook might look like:

  • Signal: The signal is a free-tier user who tested out premium functionality. When this happens, reps are notified that someone has shown interest in an upgraded feature.
  • Messaging: This is a great opportunity for reps to showcase how other companies are getting value from the feature. Rather than getting tied up in feature selling, the focus here is understanding the value a feature adds to the company’s business. 
  • Action: We've seen a lot of companies with pre-built Outreach or SalesLoft sequences for people using premium functionality or hitting other triggers. A next step here could be adding the PQL to an Outreach sequence with messaging that is tailored to their use case. 

Scenario #2: Users who hit usage caps

Whether it’s event volume or number of seats or instances, product-led companies often have usage caps in place for their free product tier. As someone gets close to hitting that limit, sales reps will want to talk to them about upgrading to a paid tier. 

In this scenario, your playbook might look like: 

  • Signal: When someone is close to reaching the usage limit, it signals to reps that they’re a power user.
  • Messaging: Alerting reps to users who are getting close to their usage caps gives them the right context to explain the value of upgrading to a higher tier (i.e. higher or unlimited usage). It’s also a good time to review the account to determine who else they should reach out to, such as the decision maker. 
  • Action: A next step here could be creating a lead in the CRM for folks using the product but aren’t being tracked. For example, a power user who isn’t a decision maker but is someone you don’t want to slip through the cracks.

Scenario #3: Users approaching their seat limits

This is a common scenario for traditional SaaS companies with seat-based pricing, looking to identify growth within existing teams. For example, they might have someone who signs up, invites one person, and is on the free plan for months before ultimately inviting 20 more people from their company.

In this scenario, your playbook might look like:

  • Signal: Approach, or exceeding, seat limits is a huge buying signal for sales reps.
  • Messaging: One thing reps can do here is send a screenshot of team usage—not just who’s using the product but a breakdown of what they’re doing and how often they’re logging in. The goal here is to build a story around the value the company gets from using your tool. 
  • Action: In a situation like this, you might want the rep to open an opportunity. 

4. Finally, build and execute your sales plays using a tool like Calixa

As a last step, execute your playbook using a Product-Led Sales platform that can automate the process from start to finish. Since most free-to-paid conversion plays are based on user behavior in the product, Calixa gives sales teams the product and sales data they need to run plays and close deals more effectively. 

Automatic alerts give sales reps a clear understanding of signal and action steps such as the ones in the free-to-paid conversion playbook example below:

  • Review this company's current product usage 
  • Create that user that tried the premium feature as a lead in Salesforce 
  • Send a follow-up email via this add-to-Outreach sequence. 

With fast, easy access to product usage data, sales reps can have rich, timely conversations with prospects and move their deals across the finish line more quickly.

👉 Learn more about Calixa's Playbook Automation System.

Watch the full webinar

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How to

How to build an upsell and expansion playbook

Learn the most common upsell and expansion plays and a simple framework to build your own playbooks.

Stephen Moock

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·
 min read
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How to

How to build a free-to-paid conversion playbook

Learn the most common free-to-paid plays and a simple framework to build your own playbooks.

Stephen Moock
|
Head of Sales and Success
|
Calixa

Subscribe to High Intent

Your PLG roundup in 5 minutes.

January 23, 2023
ReadTime

As a useful tool to accelerate self-serve revenue growth, Product-Led Sales playbooks are top of mind for every PLG sales leader. But building playbooks is no easy feat without a fine-tuned strategy in place. Chatting with playbook first-timers, we hear questions like:

  • What kinds of sales playbooks do most PLG folks use?
  • Is there a framework that playbooks should follow?
  • What would a free-to-paid conversion playbook look like?
  • Do we need any specific product or sales data?

In our recent how-to webinar, Free-to-Paid Conversion Playbook, we covered all these questions (and more!). Read on for a recap of what playbooks are, examples of free-to-paid conversion plays, and a simple framework you can use to build Product-Led Sales playbooks.

Breaking down the basics: Product-Led Sales playbooks

What is a Product-Led Sales playbook?

Product-Led Sales playbooks are step-by-step guides that level the playing field between sales reps, so to speak. Standardizing sales best practices into an easily consumable format, a playbook helps your least-tenured reps run deals using the same tactics as the most experienced ones. In this way, it helps Sales build repeatable, scalable success across the team, minimizing risks and keeping conversion rates high.

Rarely, if ever, are playbooks a one-size-fits-all use case. Most PLG companies build multiple playbooks to outline specific tactics and tools for different types of product qualified leads (PQLs) or accounts at different stages of their activation or adoption lifecycles. 

Who uses Product-Led Sales playbooks?

Sales reps use playbooks to understand the right steps to take for timely PQL follow-up. Playbooks set every rep up for repeatable success in high conversion and close rates. Sales leadership provides guidance about playbooks so that everyone is operating, selling, and running deals based on agreed-upon best practices. 

What are the most common Product-Led Sales playbooks?

Depending on your PQL conversion goals, there are any number of use cases a sales team might build a Product-Led Sales playbook for. The following are three common playbooks we see across the PLG space. 

  • Free-to-paid conversion playbook: The bread and butter of PLG, this playbook converts free users onto paid plans. It’s an easy first pick—most sales teams already have a motion in place with a need to standardize it across the company.
  • Upsell expansion playbook: With the unofficial motto of 2023 being “Do More With Less,” this playbook is another popular choice for Sales and GTM leaders. Upselling higher tiers and add-ons to happy customers is an efficient way to capture revenue. 
  • Enterprise account consolidation: This is favored by companies with significant spikes in user adoption and usage across different teams. It involves merging multiple workspaces or lower tier accounts into one centralized account on a large enterprise plan.

Building winning playbooks: Free-to-paid conversion

While there are countless ways to build a sales playbook for free-to-paid conversion, we recommend following these guidelines to expertly navigate the process.

1. First, start with a simple framework. 

Complicated is the enemy of execution. With this in mind, we recommend using the  “Signal → Messaging → Action”  framework to build out your playbook. Each of the three stages are defined below, and you’ll see what it looks like in action shortly. 

  • Signal: The user behavior that triggers your sales play
  • Messaging: How you want reps to think about the signal and communicate its value to the customer
  • Action: The steps or tactics reps should take to move the deal along 

2. Then, identify your top free-to-paid conversion scenarios

With this framework in place, identify the free-to-paid scenarios and user behaviors you want your reps to take action on. While user behavior varies across companies, we commonly see these three scenarios:

  • Scenario #1: Users who try premium functionality
  • Scenario #2: Users who hit usage caps
  • Scenario #3: Users approaching their seat limits

3. Now, begin mapping out your scenarios.

Sales plays in hand, you can start mapping them out using the “Signal → Messaging → Action” framework. To illustrate this framework in action, let’s map out the three free-to-paid conversation scenarios above.

Scenario #1: Users who try premium functionality

A common free-to-paid conversion scenario is when free-tier users show intent by experimenting with functionality that’s paywalled, behind a feature gate, or limited in some capacity. 

In this scenario, your playbook might look like:

  • Signal: The signal is a free-tier user who tested out premium functionality. When this happens, reps are notified that someone has shown interest in an upgraded feature.
  • Messaging: This is a great opportunity for reps to showcase how other companies are getting value from the feature. Rather than getting tied up in feature selling, the focus here is understanding the value a feature adds to the company’s business. 
  • Action: We've seen a lot of companies with pre-built Outreach or SalesLoft sequences for people using premium functionality or hitting other triggers. A next step here could be adding the PQL to an Outreach sequence with messaging that is tailored to their use case. 

Scenario #2: Users who hit usage caps

Whether it’s event volume or number of seats or instances, product-led companies often have usage caps in place for their free product tier. As someone gets close to hitting that limit, sales reps will want to talk to them about upgrading to a paid tier. 

In this scenario, your playbook might look like: 

  • Signal: When someone is close to reaching the usage limit, it signals to reps that they’re a power user.
  • Messaging: Alerting reps to users who are getting close to their usage caps gives them the right context to explain the value of upgrading to a higher tier (i.e. higher or unlimited usage). It’s also a good time to review the account to determine who else they should reach out to, such as the decision maker. 
  • Action: A next step here could be creating a lead in the CRM for folks using the product but aren’t being tracked. For example, a power user who isn’t a decision maker but is someone you don’t want to slip through the cracks.

Scenario #3: Users approaching their seat limits

This is a common scenario for traditional SaaS companies with seat-based pricing, looking to identify growth within existing teams. For example, they might have someone who signs up, invites one person, and is on the free plan for months before ultimately inviting 20 more people from their company.

In this scenario, your playbook might look like:

  • Signal: Approach, or exceeding, seat limits is a huge buying signal for sales reps.
  • Messaging: One thing reps can do here is send a screenshot of team usage—not just who’s using the product but a breakdown of what they’re doing and how often they’re logging in. The goal here is to build a story around the value the company gets from using your tool. 
  • Action: In a situation like this, you might want the rep to open an opportunity. 

4. Finally, build and execute your sales plays using a tool like Calixa

As a last step, execute your playbook using a Product-Led Sales platform that can automate the process from start to finish. Since most free-to-paid conversion plays are based on user behavior in the product, Calixa gives sales teams the product and sales data they need to run plays and close deals more effectively. 

Automatic alerts give sales reps a clear understanding of signal and action steps such as the ones in the free-to-paid conversion playbook example below:

  • Review this company's current product usage 
  • Create that user that tried the premium feature as a lead in Salesforce 
  • Send a follow-up email via this add-to-Outreach sequence. 

With fast, easy access to product usage data, sales reps can have rich, timely conversations with prospects and move their deals across the finish line more quickly.

👉 Learn more about Calixa's Playbook Automation System.

Watch the full webinar