Product-led growth was the dream. No sales team. Customers find you, sign up, upgrade themselves. Low CAC. High margins. The SaaS holy grail.
We built it. Beautiful self-serve flow. Credit card checkout. Usage-based plans. Automatic upgrades.
Then we looked at the numbers.
The Self-Serve Reality
| Metric | Self-Serve |
|---|---|
| Monthly signups | 800 |
| Conversion to paid | 3% |
| New customers/month | 24 |
| Average contract value | $200/month |
| Annual value | $2,400 |
| New ARR/month | $57,600 |
| Churn (annual) | 40% |
40% annual churn. Small customers, low commitment, high churn. We were on a treadmill.
The Experiment
We hired one salesperson. Just to see. She focused on larger companies who signed up but didn't convert self-serve.
| Metric | Sales-Assisted |
|---|---|
| Leads worked/month | 40 |
| Demos scheduled | 25 |
| Proposals sent | 12 |
| Closed deals | 4 |
| Average contract value | $4,000/month |
| Annual value | $48,000 |
| New ARR/month | $192,000 |
| Churn (annual) | 15% |
One salesperson. 3x the ARR of the entire self-serve funnel. 1/3 the churn.
Why Enterprise Wins
Decision-makers need hand-holding: Self-serve assumes the user has authority to buy. Enterprise buyers don't work that way. Procurement, security, legal—all need human interaction.
Complex use cases need customization: Self-serve offers one size. Enterprise wants configuration, integration support, implementation help. They'll pay for it.
Higher ACVs mean higher tolerance: A $48K customer expects calls, support, and account management. That's fine—the margin covers it easily.
Lower churn compounds: 15% churn vs 40% churn is the difference between building value and running in place.
The Pivot
We didn't kill self-serve entirely. We repositioned it:
- Self-serve = lead generation: Small teams sign up, use the product, become internal champions.
- Sales = expansion: When usage grows, sales reaches out to convert to enterprise.
- Pricing = self-serve is starter only: Any serious usage requires talking to sales.
Today's Numbers
| Channel | ARR | % of Total |
|---|---|---|
| Self-serve (unchanged) | $600K | 8% |
| SMB sales | $2.1M | 28% |
| Enterprise sales | $4.8M | 64% |
Enterprise is 64% of revenue. Self-serve is lead gen and long-tail. The business model flipped.
When Self-Serve Works
- Consumer products (huge volume, low ACV is fine)
- Developer tools (users are buyers, no procurement)
- Low-stakes purchases (under ~$5K/year)
- Products with no implementation complexity
For B2B with $10K+ potential ACV? Sales almost always wins.
Self-serve feels efficient because there's no sales cost. It's often inefficient because there's no sales revenue either.
Written by XQA Team
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