Pricing and Packaging in Covid-19 Times - Heavybit
High-resolution slides available here: https://docs.google.com/presentation/d/1MygsJoOjQutdO116xvXHqLNThcwQ9eswyN38YDLjLVk/edit?usp=sharing As the impacts of COVID-19 continue to reveal themselves across the industry, there are some things that we can say for certain: enterprise software budgets have tightened, and the procurement teams who oversee them are showing preference to “tried-and-true” solutions in an effort to minimize risk. As an early stage B2B startup perceived as higher risk by these large organizations, how can you continue making deals and maintain your revenue? In this session, Donnie Berkholz will walk us through the often convoluted enterprise procurement and budgeting process so that you may better understand how to reposition your product, and possibly your pricing, in order to help your enterprise prospects hedge risk and sign new contracts. In addition, Donnie will talk through changes you can make to your overall go to market, including redoubling bottom-up efforts in order to decrease CAC and increase both product adoption and purchase on the ‘low end’ of the market.
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Pricing and Packaging in Covid-19 Times - Heavybit
- 1. Pricing & packaging in Covid-19 times Heavybit, May 2020 Donnie Berkholz
- 2. @dberkholz Today’s goals Explain Explain a typical example of enterprise spend approval & procurement. 2 Know Know how the enterprise budgeting cycle works, as well as its relevance to Covid-19 impacts and responses. 1 Apply Apply new knowledge to decisions such as: ● targeting timing to engage with prospects, ● investing in bottom-up vs top-down adoption, ● when and where to form partnerships, ● and more 4 Understand Understand how Covid-19 changes enterprise adoption. 3
- 3. @dberkholz Did you do your homework? RedMonk: What is packaging? It’s all about the barrier to entry. a16z: SaaS Businesses Weather Hard Times by Focusing on Efficient Growth SaaStr Summit: Sales & GTM in uncertain times with Salesforce DoD Defense Innovation Board: Detecting Agile BS
- 4. @dberkholz What we’ll cover today Budgeting Covid-19 AdaptingBuying
- 5. @dberkholz How enterprises budget money May/Jun Budget planning begins Finance sends out spreadsheets to everyone, leaders start to figure out the new format & ask their teams for ideas Jul/Aug Planning firms up for initial submission Numbers start to get more real, with business cases Sep-Nov Executive negotiations & cross- functional alignment Top-down setting of dollar amounts & priorities based on proposals Dec Board approval Board of directors meets quarterly, approving next year’s budget toward the end of the year Jan/Feb First spend approved First “project” goes through the submission process — reviews for architecture, security, operability, financials, etc Feb/Mar First deal closes Following formal approval of funding, vendor negotiations & purchase occur Illustrative example, shown for fiscal year aligned with calendar year
- 6. @dberkholz How enterprises buy expensive things 54321 Illustrative example
- 7. @dberkholz Covid-19 slowed growth and progress 451 Research, Coronavirus flash survey March 2020, n=640
- 8. @dberkholz Some increase in spend, especially for remote productivity 451 Research, Coronavirus flash survey March 2020, n=662
- 9. @dberkholz Adapting to change driven by Covid-19
- 12. @dberkholz Opportunities Bottom-up adoption Selective investment Deals & partnerships
- 13. @dberkholz Bottom-up adoption Emphasize users over buyers in a scalable way Communities, OSS or freemium Ensure self-service purchase is possible
- 14. @dberkholz Selective investment Focus first on retention Make investments in healthy opportunities Decrease “blast” marketing
- 15. @dberkholz Deals & partnerships Push spend into their next fiscal year Build in growth, free PS, etc Partner with preferred resellers
- 16. @dberkholz What we’ve covered today Budgeting Covid-19 AdaptingBuying
- 18. @dberkholz 451 Research: Impact of COVID-19 (free set of reports) Stack Overflow: 2019 Developer Survey Results Donnie Berkholz: How much influence do developers really have? (video or slides) … and the homework shared at the beginning Resources
Notes de l'éditeur
- Budgeting Buying Changes Adapting
- Where do vendors first get engaged? Could be at #1 to as late as #4! OSS, opex, low-cost adoption changes the dynamic significantly
- Q. Which, if any, of the following strategic plans has your organization delayed, reduced or halted as a result of the situation surrounding the coronavirus outbreak? Please select all that apply. Impact is clearly industry-specific
- Q. Which, if any, of the following technology products or services do you expect your organization to spend more on as a result of the circumstances surrounding the coronavirus outbreak? Please select all that apply. 34% expected to spend more on technology, with 63% having no change. [Q. For each of the following expense categories, please indicate whether your organization is spending more or less money as a result of the coronavirus outbreak. - IT resources/assets (n=642)]
- Budgeting Buying Changes Adapting