Credits 💡 The SaaS Growth Hack You Aren't Using Yet 💡

Cash 💵, Moolah 💰, Chedda 🧀, Benjamins 💸, Bread 🍞

Who doesn’t want some? And when it is free money … ooooooh baby, now we are talking. So today, I’m going to talk about CREDITS and how to use them effectively in your SaaS company. We’ll dive into the history of credits, how we used them at Slack to grow faster, and I’ll share some practical tips on implementing them in your own SaaS or AI startup. Let’s go!

💡 What Are Credits?

When I mention credits, I’m not talking about accounting terms like debits and credits. Instead, I’m referring to the practice of giving credits to new users to reduce friction and encourage them to use your product or paid plans. At Slack, we tested different amounts of credits—like 50 or 100 credits—to see what worked best. These credits were given to users when they signed up, and the idea was to reduce the barriers to trying out our paid plans.

🚀 How We Used Credits at Slack

In the early days at Slack, many users signed up on the free plan. While I’m a big fan of the freemium model, we wanted to reduce friction for users moving to a paid plan. So, we’d calculate how many credits a team had and let them use the pro plan for free for a certain period. For example, if a team had 100 credits and the pro plan cost $7 per month per user, they could use the pro plan for a month and a half or two months for free.

This approach was all about reducing friction—whether it was adoption friction (the product being hard to use), cognitive friction (confusing pricing and packaging), or pricing friction (high cost). Removing these barriers helps you grow faster, which is a key tenet of Product-Led Growth (PLG).

🤝 Encouraging Virality with Credits

Another strategy we used at Slack was a referral program. If a user got someone else to sign up, both parties would receive credits. We called it “Give a hundred, get a hundred.” This not only reduced the cost barrier for new users but also turned our existing users into marketers, helping to spread the word about Slack.

🛠 Practical Tips for Implementing Credits

1. Start Small: Test different amounts of credits to see what works best for your users.

2. Reduce Friction: Use credits to lower the barriers to trying out your paid plans.

3. Referral Programs: Encourage existing users to bring in new users by offering mutual credits.

4. Measure Results: Track key metrics to see the impact of your credit program.

5. Iterate: Be prepared to tweak your approach based on what you learn from your measurements.

💬 Share Your Thoughts

I’d love to hear your experiences with using credits in your SaaS strategy. Have they worked for you? What challenges have you faced? Share your thoughts in the comments below!

🦥 Tiny SaaS CMO Pro
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