Contracts
In prior posts, I discussed when a company should have a Terms of Service, Privacy Policy, and Data Processing Agreement in place. Both B2B and B2C startups can benefit from getting these documents prepared. In today’s post, I discuss a SaaS agreement that many software and SaaS companies will need, whether B2B or B2C: the Pilot Agreement, also called an Evaluation or Trial Agreement.
Often, startups at various stages will want to offer a pared down version of the product at a cheaper price to customers, for a limited period of time. In this case, the pilot or trial could be free or for a small fee for 7, 14 or up to 30 days. The customer often gets access to only certain features and the contract itself provides for very few protections for the customer. It’s the customer’s opportunity to test out a product and see if it does as promised. The intent is to sell them on a full contract with the full suite of features at a higher price, once they’ve tested out the product and determined it’ll add value to their work or lifestyle.
If your sales team has determined that trials are a great way to sell customers on your product, putting together a pilot program makes sense, from operationalizing on the tech side to getting the right documents in place.
Here are common key terms you’ll find in a Pilot Agreement:
Generally, companies don’t provide support and limit product functionality, such as integrations and data processing, which they may want to make explicit. Pilot Agreements also usually state the product is provided “as-is” and cap their liability at a very low amount, given the trial nature.
How you implement your Pilot Agreement will depend on the type of product you have and how customers sign up. If customers sign up online in a self-service model, it may make sense to set up your Pilot or Trial Agreement as a click-through, collecting payment information up front, and then charging the customer after the pilot period has ended, if the customer hasn’t opted out. Or, you can incorporate terms covering the pilot program in your online Terms of Service.
However, if you expect your customers to sign standalone SaaS Agreements, such as for enterprise accounts, it may make more sense to structure your Pilot Agreement as a standalone contract and allow minimal negotiations.
A commercial attorney can help you draft and structure your Pilot Agreement to mesh with how you handle existing sales and the current product experience.
