Evaluations in SaaS; how they work, why offer them and what’s it got to do with Stripe?

Neal Riley, Salable founder

The past decade working with Multi-Sided Platforms has taught me a thing or two…I’ve been afforded great opportunities to experience the world of the platforms and their respective vendor ecosystems.

Converting customers through a delightful experience is the dream of any SaaS business. Most successful organisations invest in ensuring that the right features, experience and design language are presented to the customer. This often subtle art of product development has a sibling in the commercial levers used when distributing a product. And in competitive environments, small differentiators in a product’s capability or commercial strategy can drive huge successes.

One tried-and-true method is the Evaluation: A free or paid period with bounded restrictions on use of some or all of a product or services functionality.

The ‘evaluation’, ‘trial’ or ‘test drive’ have existed in many forms, long before the digital economy was taking shape. From automobiles to mail order catalogues, the evaluation was an effective tool to get engagement from a wide(r) customer base.

Why have an eval?

The general idea with an evaluation is that you lower the barrier for a customer to start using your product or service. This ideally charts a customer on a course for the features known to be ‘sticky’. Then as they start to adopt and receive value, the necessary components are gradually introduced, in order to enter into a contract. This can come in the form of a product identifying a user, or when a product will ask for credit card details. Barrier reduction means reducing the steps to achieving value for the customer and a closed deal for you.

For products (like SaaS) where a low-touch sales model is their go-to-market, this ‘eval’ approach is vital to growth. Capturing as much customer interest as possible is reliant upon the product and any digital assets being the hero.

Different ways to evaluate

There are many levers you can use to influence buying behaviour throughout an Evaluation. These levers operate a continuum by which you can encourage (or discourage) customer activity and engagement. Two common levers to pull are:

• Time (e.g. 7 day trial)
• Product use (e.g. use of feature X or share of sign-up code to friend)

There are very simple (further) examples of these kinds of models in use:

• Free 30 day trial of Product X, then your access to the product is revoked
• Free 30 day trial of Product Y, which reverts back to ‘paid’ features from ‘free’ features upon non-purchase
• The first 30 uses of feature A of Product Z are free, but uses beyond this count require a purchase of Product Z

The interplay between these commercial elements, when composed with other services like identity and payment, make for an interesting melange of potential adaptations. And this can promote a smooth and seamless customer activation and buying experience.

Core components of a SaaS product

In order to build an Evaluation into your product or service, key components and their definitions need to be established;

• Features: Capabilities within the Product that a customer can use to receive direct or indirect value
• Entitlements: The contractual relationship between the product vendor and customer, which enables certain access to Features.
• Subscriptions: One of the ways a product vendor can receive recurring payment for Features of a Product.

There are other elements that rely on these core components (and vice versa). For instance, in order for a product vendor to accurately generate an entitlement some reference to the customer identity would need to exist.

The interplay of these components makes for a functioning, successful application. The vendor invests in new features, which get added to customer entitlements. The continued value stream (and underlying customer growth) is used to expand through new subscriptions and entitlements, or by maximising customer spend through other mechanisms such as pricing.

Stripe subscriptions aren’t entitlements

“How do I create an evaluation period — without taking a credit card first — when using Stripe?” It’s a question we come across alot. And our answer is always very simple: use Stripe for what it does best, subscriptions.

Subscriptions are the means by which money changes hands and importantly, the schedule and intent to continue to purchase in the future. The Entitlements are what the subscription generates. While many of the parameters of the Entitlement and Subscription are shared (e.g. start and end dates, customer), there are times where decoupling these can give a product a huge advantage. For example, you might allow use of paid features 30 days after the last date paid for by the customer, or allow a customer to start an evaluation before having to enter credit card details.

Building your evaluation flow

There are a few useful questions to ask yourself when gauging whether evals should be part of your acquisition strategy.

• Can a customer see immediate value from my product?
• How long does it take for customers to reach the tipping point of activation when using the product?
• What’s the buying behaviour of adjacent apps and platform ecosystems?
• Upon cancellation of a subscription, what feature access should a customer revert to?

There are opportunities in bundling other services as part of the Evaluation;

• Support: adding support as part of the evaluation removes yet another barrier to longer-term use, increases value to the customer and adds a level of reassurance. Showcasing the support reduces the risk of ‘buyers regret’ ensures it’s not just the product the customer is evaluating.
• Documentation & Guides; there’s no point in having a great product or service, coupled with a stellar trial offering, if it’s difficult for the customer to get started. Quality guides are prized very highly and reflect upon your product. They’re part of the proposition and further reduce any barriers to usage.

What to do next? Build-in an evaluation

In summary, evaluations should be part of any product development and be easy to manage, measure and maintain. Plus the great thing about them is that if you conceive of a version (of a trial) that isn’t working for your customers/bottom line/strategy, then you can change it up and try another way. Evaluate your own eval, it’s perfect.

Get access to Salable and build-in eval, in your app

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