Pricing Software Products

Transcription

1 Pricing Software Products Delight Your Customers While You Turn a Profit Jim Semick, ProductPlan

2 About Pragmatic Marketing Experts in technology product management and product marketing Specialize in training Trained hundreds of thousands of people at thousands of companies since

3 About the Presenter Jim Semick Founder of ProductPlan, roadmap software for product & marketing teams On founding team of AppFolio (B2B SaaS) Validated and helped launch GoToMeeting and GoToMyPC (acquired by Citrix) Frequent speaker on product 3

4 Agenda Why it s a new world for pricing models Why customer value is integral to successful pricing Key considerations: early validation and lifetime value Case study examples 4

5 Poll In your organization, who determines pricing? Product Management Marketing Sales/Finance Other 5

6 More opportunities than ever to differentiate through pricing 6

7 Traditional Software Pricing Limited pricing model options Perpetual license fees, enterprise server licenses, etc. Maintenance agreements Upgrade fees Disconnected from the value proposition 7

8 Software Pricing: A New World Dozens of new models Subscription-based Service often included Always updated A part of the value proposition 8

9 So Many Pricing Flavors Per-user Data/Processor time (AWS) User + Free (G2M, ProductPlan) Per-node/server (Hadoop) Storage (Dropbox) Per visitor/traffic (AdRoll) Features/packages Open Source (Red Hat) Project (Basecamp) Advertising (Facebook) Per item/contact (AppFolio) Broker (AirBnB) Freemium (LinkedIn) and many more 9

10 Discovering the Best Model In-depth interviews with buyers Validate with decision maker Ask open-ended questions Understand the job to be done Understand pains and gains Understand purchase process The goal 10

11 Align Pricing with Customer Value 11

12 Quantitative Value Cost savings Time savings Increased revenue Meet business objectives 12

13 Qualitative Value Reduced frustration Lifestyle benefits Reduced risk (sleep better) Looking good (social benefit) 13

14 Estimate Lifetime Value Early 14

15 15

16 Pricing is a Part of the Product When is the right time to set pricing for new products? 16

17 Poll For your last product launch, when was pricing determined? Before development During development (e.g. during Beta) Immediately before Launch After Launch 17

18 Typical Pricing Model Decisions 18

19 Move Pricing Validation Earlier 19

20 Case Studies 20

21 Easy to understand vs. competitors Resonated with customers Success-based pay more as business grows Additional revenue through value+ services 21

22 All You Can Meet Unlimited meetings No overage charges How did we decide pricing? 22

23 Quantitative Value Cost and time savings (reduced or eliminated travel) Cost savings (switching from per-minute pricing of existing solutions) Increase revenue (close more sales deals by conducting better demos) 23

24 Qualitative Value Motivates Lifestyle benefits from conducting meetings remotely Reduced frustration from switching to an easier-touse solution Reduced pain from switching to an easier-tobudget solution 24

25 Case Study 25

26 Food for Thought Customers don t care about your costs Don t be tempted by competitors innovate! More tools than ever to test pricing Sales model influences pricing (and vice versa) Pricing is highly psychological factor this in 26

27 Twitter: Jim ( me for slides) Join the conversation and learn more: Website: Blog: New articles on pricing Webinars: Tomorrow: Building Better Roadmaps Plus: Product Mgmt Articles, Free Product Trials and More! 27

28 More Information Contacts: Rebecca 28

29 Thank you for attending! NEXT MONTH Demos Download this webinar and sign up for more at pragmaticmarketing.com/live