Free users generate lifetime value through organic activity, even without marketing spend. But sales teams often see the free tier as competition for paid conversions. Calendly's free version showed how a free tier can undercut sales efforts, forcing companies to balance keeping free users engaged while nudging them toward paid plans.
What is our strategy for converting free users or retaining free users?
Yeah, exactly, and the current freemium model, what I thought about it.
And I like the second half, which I think you asked, which is, how do you think about your free-frees? Like, how valuable are your free-frees to you today at scale?
So we love our free users, and we're happy for our users to be free. The way we view it is the first level of value is you use our product in any capacity, we don't care if you use it for free or you pay. And then the next level of value is you use it and you pay for it. Because in our world, even free users have an LTV associated with them. Because the number one, we spend almost $0 on, well, we have headcount in marketing, but we have almost $0 in marketing campaigns. So it's all being driven by the activity of the users on the platform.
Freeze your marketing team, right?
Yes, exactly, so we're happy to, to, we're happy for people to use the product for free. I think if you talk to a sales rep at Calendly, their number one competition is not any of the competitors that they mentioned, it's the free.
Yeah, they don't love the free version, dude. The sales team doesn't love it, right?
So by now we've done a number of pricing and packaging engagements, which I think was another question that came up, and the recommendation they all make is like, you know, like, limit the features that you give on the free plan, and we've resisted that. Besides then, I don't think we've ever taken anything away from the free plan.
