CTO John Riordan Talks Freemium UCaaS with Peter Radizeski

Last week, OnSIP CTO John Riordan was invited to talk about our new freemium offering on a podcast with Peter Radizeski, Founder and President of RAD-INFO Inc. Peter is an accomplished 'blogalyst', speaker, author, and consultant. He is an experienced consultant in the telecom industry, helping service providers with sales training, marketing, channel development and business strategy. Peter also writes for TMCnet.com on developments in the enterprise cloud services market.

Why Freemium?

Peter starts off the podcast by asking John what the freemium UCaaS offering means for OnSIP:

“For us, it means taking what has worked well in the SaaS (Software as a Service) space…[to get] software into people’s hands. We’re starting with a free offering, offering them some value, then working to upsell them. It’s a great model for driving business over the web.”

John goes on to explain that traditionally, UCaaS providers have not offered freemium because of a longer sales cycle and the difficulty in getting people to use the service right away. OnSIP is working to reduce that with the Free plan by getting people to sign up and start using the service immediately. Customers can login to the OnSIP app, add users, and make web calls with just a few clicks. They can also upgrade to a paying account at any time to get enterprise features like PSTN access, calling queues and auto attendants.

Driving Acquisition with Freemium

Peter notes that customers seem to be “getting an awful lot for free” in OnSIP’s “feature-rich” Free plan. In addition to a WebRTC-based phone, customers have access to integrations with Slack, ZenDesk, Chrome, and more. John explains that the goal is to provide people with enough value to actually get them to use our product.

To help explain OnSIP’s strategy, John talks about freemium from a product perspective. Internally, OnSIP uses ‘pirate metrics’, a growth hacking framework that includes five stages: acquisition, activation, revenue, retention, and referral.

“The first step is to get the customers acquired, and we expect freemium to help with that….The follow up for us is to drive activation—meaning that they come in, actually use the product, start making some calls, and start getting some value out of it. It’s important for us to drive that because it’s a precursor to revenue and retention and referrals.”

The Key to UCaaS Adoption

Peter points out that, “For UCaaS, we know that there’s a couple of things that get in the way of retention. One is the customer experience. Two is adoption of anything besides, say, three features.” John acknowledges that adoption is an issue that OnSIP is looking to address further with a “frictionless” signup process. This includes using Slack and Google as signup mechanisms and getting other members of the organization added to the platform immediately. This essentially combines the signup and onboarding process so that users can interact with each other sooner and get a good experience with OnSIP.

Part of OnSIP’s web-based approach to freemium is also to drive a SaaS-based turnup. Since no DIDs need to be selected or delivered and no phones need to be shipped, customers can sign up, login, add users, and start making calls within minutes, compared to weeks or months with a traditional service provider.

WebRTC and the Evolution of Business Communications

John goes on to describe how WebRTC has allowed OnSIP to offer innovative solutions like website call buttons and video collaboration with nothing but a web browser.

“Real-time business communications is going to be moving from the PSTN and will continue to do so….The user interface is morphing from what has traditionally been a telephone. It’s been the same user interface for a hundred years now.”

In fact, John states that it’s a bit surprising that these aging technologies don’t disappear quicker. Peter points out that there’s a lot of reasons why the telephone is still around: “When you’re doing stuff like moving to browser calling, you’re making them make a change to their business process. And the biggest hurdle we’ve had to UCaaS adoption is that someone who’s been here for 25 years doesn’t want to change how they do business.” John admits that it’s very difficult to replace a business process, especially one that’s very entrenched.

To conclude the conversation, Peter notes that not a lot of companies track user adoption, and are surprised when a customer leaves at the end of a contract. OnSIP, however, is very sensitive to user adoption. As John states,

“We don’t have any contracts, so everything is month-to-month….So our attention to [user adoption] is not once the contract is up - one year, three years, five years down the line - our attention to that is every month. We’re looking at what features people are using, because people can leave at any time.”

For more information on OnSIP’s Free plan, check out our blog post announcement here.

Peter was also a guest on an episode of #SMBlab with OnSIP CEO Mike Oeth. Watch the full video recap here: Tackling Challenges in Channel Sales in 2016 on #SMBlab [Video]