How giving away its products drove revenue for learning software company
Many software companies, including Zoom, MongoDB and Magento, have successfully used a freemium model—which makes it easier for prospects to say “yes” and plants the seeds for future growth. But for online education company Pluralsight, a free offer also led to new revenue.
After the pandemic shut down the economy in March, Chief Marketing Officer Heather Zynczak challenged her team to create a distinctive marketing promotion. The result was #FreeApril: For the entire month, access to Pluralsight's platform of video training courses for software developers, IT administrators, and creative professionals was free. Thousands of new users around the globe took advantage. To Zynczak’s surprise, the promotion generated revenue as enterprise customers expanded usage once they saw employees using the training.
Where did the idea for #FreeApril come from?
Our mission is to democratize tech skills across the globe. We honestly believe the adage of “brilliance is equally distributed, but opportunity is not.” A lot of the people, including myself, that work at Pluralsight are here because we're giving opportunities to everyone, everywhere to better their skill set and to make a better life. When COVID happened, we quickly went into the mode of what this means from a mission perspective. We watched employment rates plummeting, unemployment increasing. We watched people struggling to stay at home and flatten out the curve. That's really where #FreeApril came from. It came from this altruistic place of how to support the community at large, and how to be true to our mission.
How long did it take to plan and launch?
It was probably three to four days to decide how we do what we do, and then a week of execution to get us ready. We started talking about it mid- to late March and it launched in the beginning of April. What #FreeApril did was give anybody, anywhere the ability to use our entire platform with no limitations completely free for the entire month. You didn't have to give a credit card, just your email. This wasn't a trial to buy. It took a couple of days to decide because we are a publicly traded company and we have fiduciary responsibility to our shareholders.
What were your expectations?
When we launched #FreeApril, we actually believed it would be a negative to our revenue, to our top line. We actually thought it could be $5 million to $10 million off, but we still chose to do it. It didn't end up that way. We just had an earnings call yesterday; we actually exceeded revenue goals set way before #FreeApril was a twinkle in our eye. If you look at who signed up for it, it was people all over the globe and countries and markets that we don't even have a strong presence in. It really went viral. I think that the generosity terms that went out to the marketplace that really resonated were ones that came from a place of “No, we really are doing this to give back.”
How many people ended up taking advantage?
Users had access to over 7,000 courses that could be anywhere from 30 minutes to several days long. This is a significant amount of learning that we gave away for free, and 1.1 million people came and took advantage of this offer. We did not expect 1.1 million. At best, based on some promotional things we've run in the past, we thought that if we were really lucky, we’d get about 100,000 to 150,000 people.
How did you promote #FreeApril?
We didn’t use one extra dollar of marketing spend beyond what my normal budget was. In fact, our budgets in Q2 got cut by about 15%, so I actually spent less money in Q2 than I normally would have. We did do a few paid things but not many, and it was mainly on social. We paid a few social influencers that weren't that expensive for us because they're really big in our space, and we did a day called Tech Skills Day ... we really promoted #FreeApril on that day. All of our authors, the people who teach the 7,000 courses, they all promoted it heavily.
We had a ton of really big companies that use Pluralsight within their tech teams. They massively promoted it to everybody in their companies. That was another surprising one, just how much our customer community really promoted it as well. In fact, we had over 10 million branded images on social media. We had over 750 million press impressions.
How have you used this success to generate leads?
Of the 1.1 million that signed up, over 200,000 used business emails. Even more than that, we're still working and can map back to business accounts. That’s 20-plus percent of business leads for us. Those folks were super active in the product, so this has been a great lead generation tool for us on the B2B side. Of those 200,000 contacts, there were 15,000 new accounts, which is huge for us in terms of customer base. Now, to be fair, these are users, and they’re users who wanted to leverage a free account. A typical B2B buyer that's going to buy a couple hundred thousand-dollar to a million-dollar contract with us isn't most likely to use a #FreeApril offer. But people work at those companies, so now we're growing and nurturing the seeds. It created a large amount of expansion opportunities for us.
What made this different from free offerings in the past?
Free offerings that we've had in the past have cannibalized sales a little bit. This didn't at all. In fact, at our last quarterly business review, two of our biggest sales leaders that own the largest territories stood up and said #FreeApril helped them make their quarter. I think the learning here is, because it was so unlimited and so generous, everybody recognized, like, “Wow, this is a good thing.” I think the altruistic part is what made there be no channel conflict, and in fact, it furthered some deals along. There were several customers that ended up being willing to buy or being pushed to buy even under budgetary constraints because of the goodwill and the trust that it built with our brand.