Ce diaporama a bien été signalé.
Nous utilisons votre profil LinkedIn et vos données d’activité pour vous proposer des publicités personnalisées et pertinentes. Vous pouvez changer vos préférences de publicités à tout moment.
Ashley Minogue
Kyle Poyar
Unlocking Scale
Through Pricing
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 2
Pricing is your most powerful lever
2%
5%...
Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 3
Yet, pricing is
a blind spot.
55%
“No one in the company
owns pricing”
36%
“A piece of someone’s
responsibility is pricing”
9%
“We have a dedicated resource
for pricing”
Pricing is even more important in a
product led world.
You can’t rely just on sales to
communicate value.
9
0%
23%
68%
25%
40%
15%
41%
30%
12%
34%
7%
5%
0% 20% 40% 60% 80% 100%
Field sales
Inside sales
No touch / self-service
<$5k...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 11
1. Freemium
2. Enable bottom-up sales
3....
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 12
Freemium
1
Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 13
17%
28%
29%
47%
83%
72%
71%
53%
0% 10...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 14
Freemium is not always impactful
New ACV...
So when does freemium
actually work?
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 16
• You have a massive market
• Your produ...
Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 17
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 18
WHY IT WORKS:
• Calendly has a massive T...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 19
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 20
WHY IT DIDN’T WORK:
• Free users quickly...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 21
Are you thinking…
“Freemium isn’t right for
me, but I still want to
take advantage of the
benefits of free. “
Get creative.
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 24
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 25
Website grader offered value for free (w...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 26
And it served as a successful lead gener...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 28
JumpCloud differentiates with free full-...
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 29
Enable bottom-up sales
2
Design your pricing to be a
bottom-up machine.
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 31
• Build champions to sell your product i...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 33
3
3
Individual employees
download the mo...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 35
Blog focuses on individual sales reps wh...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 36
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 37
Pipefy offers packages for teams as smal...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 38
Best practices for designing a bottom up...
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 39
PQLs
3
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 40
The old world
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 41
Product led world
PQL
A prospect that signed up and
demonstrated buying intent based
on product interest, usage, and
fits your target custom...
Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 43
Developed 3 different types of PQLs
for ...
Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 45
LinkedIn also uses product engagement...
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 46
So what now?
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 47
Don’t be afraid to experiment
Experim...
Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 48
Approaches to price experimentation r...
Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 49
What I’ve heard from real-life custom...
Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 50
Most common pricing research methods
...
Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 51
Sample method: Van Westendorp
0%
20%
...
Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 52
14%
42%
17%
12%
12%
2%
DISTRIBUTION O...
Follow us on Twitter @OpenViewVenture
Thank You!
Unlocking Scale Through Pricing
Unlocking Scale Through Pricing
Unlocking Scale Through Pricing
Unlocking Scale Through Pricing
Unlocking Scale Through Pricing
Prochain SlideShare
Chargement dans…5
×

Unlocking Scale Through Pricing

336 vues

Publié le

Pricing is a major blind spot in many software companies. Learn how to successfully unlock scale in a product-led world with your pricing strategy.

Publié dans : Business
  • Soyez le premier à commenter

Unlocking Scale Through Pricing

  1. 1. Ashley Minogue Kyle Poyar Unlocking Scale Through Pricing
  2. 2. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 2 Pricing is your most powerful lever 2% 5% 10% 12% 22% R&D costs (-5%) SG&A costs (-5%) COGS (-5%) Revenues (+5%) Price (+5%) IMPACT ON EBIT FROM A 5% IMPROVEMENT IN… Source: Hinterhuber (2004). Towards value-based pricing – An integrative framework for decision making. Industrial Marketing Management 33 765-778.
  3. 3. Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 3 Yet, pricing is a blind spot.
  4. 4. 55% “No one in the company owns pricing”
  5. 5. 36% “A piece of someone’s responsibility is pricing”
  6. 6. 9% “We have a dedicated resource for pricing”
  7. 7. Pricing is even more important in a product led world. You can’t rely just on sales to communicate value.
  8. 8. 9
  9. 9. 0% 23% 68% 25% 40% 15% 41% 30% 12% 34% 7% 5% 0% 20% 40% 60% 80% 100% Field sales Inside sales No touch / self-service <$5k $5-25k $25-100k >$100k Source: 2018 OpenView SaaS Metrics Survey, N=420. Dominant Sales Channel ACV Distribution Product led growth pricing isn’t just for small deals These companies employ a bottom-up sales model to efficiently sell larger deals.
  10. 10. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 11 1. Freemium 2. Enable bottom-up sales 3. PQLs 3 elements of pricing to consider in a product-led world
  11. 11. Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 12 Freemium 1
  12. 12. Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 13 17% 28% 29% 47% 83% 72% 71% 53% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Freemium Product-qualified leads Customer referral programs Free trial % of Respondents Adoption of product led growth strategies Source: 2018 OpenView SaaS Metrics Survey, N=420.
  13. 13. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 14 Freemium is not always impactful New ACV from Freemium Leads Source: http://tomtunguz.com/images/2015-PC-Survey.pdf
  14. 14. So when does freemium actually work?
  15. 15. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 16 • You have a massive market • Your product becomes more valuable the more its used • You have enough product differentiation to make freemium a “positive” experience without giving away everything • You have a low cost to serve Signals that your business is right for freemium
  16. 16. Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 17
  17. 17. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 18 WHY IT WORKS: • Calendly has a massive TAM with use cases spanning sales, recruiting, entrepreneurs, etc. • Solution is robust enough to offer clear rationale to upgrade (i.e. new event types, reporting, etc.) • Freemium drives lead gen – free version has Calendly branding and user analytics inform what’s important. Success case study: freemium as a catalyst for growth
  18. 18. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 19
  19. 19. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 20 WHY IT DIDN’T WORK: • Free users quickly surpassed paying users which led to performance and database issues. • Furthermore, support resources became spread thin impacting the level of service for both free and paid users. Failure case study: freemium comes with risk Source: https://baremetrics.com/blog/freemium-saas-implode
  20. 20. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 21 Are you thinking…
  21. 21. “Freemium isn’t right for me, but I still want to take advantage of the benefits of free. “
  22. 22. Get creative.
  23. 23. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 24
  24. 24. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 25 Website grader offered value for free (without giving away their product)
  25. 25. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 26 And it served as a successful lead generation tool
  26. 26. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 28 JumpCloud differentiates with free full-feature solution for first 10 users
  27. 27. Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 29 Enable bottom-up sales 2
  28. 28. Design your pricing to be a bottom-up machine.
  29. 29. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 31 • Build champions to sell your product internally • Capitalize on paid lead generation • Skip procurement or IT Rationale for a bottoms up sale
  30. 30. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 33 3 3 Individual employees download the mobile app for free and start using it. Then they promote it internally to the decision maker and the decision maker reaches out to us basically already sold by their employees. And then we have order takers on our side to help them get to the buying process. D AV ID B AR R E TT F O U N D E R & CE O E X PE N S IF Y “ “
  31. 31. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 35 Blog focuses on individual sales reps who become paid lead gen for large accounts
  32. 32. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 36
  33. 33. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 37 Pipefy offers packages for teams as small as 5 users and offers templates to get started
  34. 34. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 38 Best practices for designing a bottom up sales • Entry price point needs to be low enough to put it on a credit card and can bypass approval • Pricing needs to be a landing point that allows for expansion as usage increases • Package features need to be robust enough to appeal to an enterprise when they want to expand
  35. 35. Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 39 PQLs 3
  36. 36. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 40 The old world
  37. 37. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 41 Product led world
  38. 38. PQL A prospect that signed up and demonstrated buying intent based on product interest, usage, and fits your target customer criteria. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved.
  39. 39. Proprietary and Confidential ©2018 OpenView Advisors, LLC. All Rights Reserved 43 Developed 3 different types of PQLs for Freemium CRM: • Hand Raise PQL: Offer assistance in product with a particular task and users could interact with the CTA to reach out to HubSpot. • Usage PQL: Triggered a CTA based on product usage (i.e. using all of your email templates) with an option to upgrade. • Upgrade PQL: Showed features only available to paid users, they would send users to an upgrade page. HubSpot developed PQL funnel to drive meaningful revenue from free users
  40. 40. Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 45 LinkedIn also uses product engagement data to upgrade free users
  41. 41. Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 46 So what now?
  42. 42. Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 47 Don’t be afraid to experiment Experimentation is a huge part of our growth infrastructure. In 2012 we were running 2-3 experiments per month. These days we’re doing 80 per month. We’re constantly running experiments. This is driving more than $100M in incremental revenue every year. TODD JACKSON Former VP of Product Dropbox
  43. 43. Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 48 Approaches to price experimentation ranges in intensity and certaintyIncreasinglevelofintensityandcertainty Approach Description When it works best Expert judgment Rely on internal expertise and analysis of existing data (e.g. discounting, win-loss reasons) • Limited time and resources • Have (relatively) clear signals from existing data Qualitative interviews (focus groups, interviews) In-depth interviews with customers and prospects to understand needs, value and willingness to pay • New product introductions • Small number of customers who are highly engaged Quantitative concept testing Short online survey to customers and prospects, including direct questions around value and price expectations • Large number of customers across different segments • Some time or resource constraints Quantitative: Simulations & trade-off exercises Longer, more robust online survey to customers and prospects, including advanced trade-off exercises like conjoint • Strategically important decisions • Large number of customers across different segments Market testing (pilots, A/B testing) Test new pricing online or with sales reps and measure performance versus the current pricing • Have a clear idea on what to test • Need to measure the exact financial impact
  44. 44. Proprietary and Confidential ©2016 OpenView Investments, LLC. All Rights Reserved 49 What I’ve heard from real-life customers The price is not material enough to be a factor in the decision. It is not even a blip on the radar. I’m curious to see how they will monetize… It’s inexpensive now, I don’t see how they could be making any money.
  45. 45. Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 50 Most common pricing research methods Direct methods § Simulates purchasing decisions and forces respondent to make tradeoffs between products or sets of attributes § Provides information for the calculation of price- response functions § Directly asks respondent about their interest in a product and purchase likelihood at different price points § Establishes willingness-to-pay for one product Van Westendorp pricing Price perception Gabor Granger pricing Indirect methods Conjoint Measurement (ACA, DCM, CBC, MaxDiff, ACBC) A/B Tests and Shopping Carts Pricing research methods
  46. 46. Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 51 Sample method: Van Westendorp 0% 20% 40% 60% 80% 100% $0 $500 $1,000 $1,500 $2,000 %ofrespondents Indifferent price: $300 Acceptable Expensive VAN WESTENDORP RESULTS AMONG PROSPECTS $500 $1,000 HOW THE QUESTION IS ASKED: Thinking about a software solution from Company A, what price per month would you find… • ACCEPTABLE, a great buy for the money $___ • EXPENSIVE, you would think twice about buying it $___ • TOO EXPENSIVE, so expensive you would not consider buying it $__ Price per month
  47. 47. Proprietary and Confidential ©2017 OpenView Investments, LLC. All Rights Reserved 52 14% 42% 17% 12% 12% 2% DISTRIBUTION OF RESPONDENTS 40% of the time, pricing changes positively increased ARR by more than 25% Impact of pricing changes on ARR growth Source: 2018 OpenView SaaS Metrics Survey, N=420. Decrease in ARR 0-9% increase in ARR 10-24% increase in ARR 25-49% increase in ARR 50-99% increase in ARR 100%+ increase in ARR
  48. 48. Follow us on Twitter @OpenViewVenture Thank You!

×