Pricing Software
Products
Delight Your Customers While You Turn a Profit
Jim Semick, ProductPlan
About the Presenter
Jim Semick
• Founder of ProductPlan, roadmap software for
product & marketing teams
• On founding team...
Agenda
Why it’s a new world for pricing models
Why “customer value” is integral to successful pricing
Key considerations: ...
Poll
In your organization, who determines pricing?
• Product Management
• Marketing
• Sales / Finance
• Other
4
More opportunities than ever
to differentiate through pricing
5
Traditional Software Pricing
Limited pricing model options
Perpetual license fees, enterprise
server licenses…etc.
Mainten...
Software Pricing: A New World
Dozens of new models
Subscription-based
Service often included
Always updated
A part of the ...
8
So Many Pricing Flavors
Per-user
User+Free (G2M, ProductPlan)
Storage (Dropbox)
Features / packages
Project (Basecamp)
P...
Discovering the Best Model
In-depth interviews with buyers
Validate with decision-maker
Ask open-ended questions
Understan...
Align Pricing With
Customer Value
10
Quantitative Value
Cost Savings
Time Savings
Increased Revenue
Meet Business Objectives
11
Qualitative Value
Reduced frustration
Lifestyle benefits
Reduced risk (sleep better)
Looking good (social benefit)
12
Estimate Lifetime Value Early
13
LTV > 3* CAC Customer Acquisition Cost
14
Pricing is a Part of the Product
When is the Right Time to Set
Pricing for New Products?
15
Poll
For your last product launch, when was pricing
determined?
• Before development
• During development (e.g. during Bet...
Typical Pricing Model Decisions
17
Move Pricing Validation Earlier
18
Case Studies
19
Easy to understand vs.
competitors
Resonated with
customers
Success-based – pay
more as business grows
Additional revenue
...
“All You Can Meet”
Unlimited meetings
No “overage” charges
How did we decide pricing?
21
Quantitative Value
Cost and time savings
(reduced or eliminated
travel)
Cost savings (switching
from per-minute pricing of...
Qualitative Value Motivates
Lifestyle benefits from
conducting meetings
remotely
Reduced frustration
switching to an easie...
Case Study
24
Food for Thought
Customers don’t care about your costs
Don’t be tempted by competitors – innovate!
More tools than ever to...
Jim Semick
Twitter: @jimsemick
Email: jim@productplan.com
(email me for slides)
Join the conversation and learn more:
Webs...
More Information
Contacts:
• Stacey Weber
sweber@pragmaticmarketing.com
@pragmaticmktg
27
Thank you for attending!
Download this webinar and sign up for more at
pragmaticmarketing.com/live
of 28

Pricing Software Products: Pragmatic Marketing Webinar

Profitability Webinar Abstract Pricing software products profitably presents unique challenges—and opportunities--for product and marketing teams. In this Webinar you will learn: ● How to price based on customer value (and delight customers) ● Why software-as-a-service (SaaS) pricing is different than pricing traditional products ● Why customer lifetime value (LTV) is so essential for product success ● Alternative pricing models for products ● Pricing for competitive differentiation ● Tips for successfully pricing new products ● Case study examples Jim Semick from ProductPlan (product roadmap software) describes how you can delight customers and create a profitable product.
Published on: Mar 4, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - Pricing Software Products: Pragmatic Marketing Webinar

  • 1. Pricing Software Products Delight Your Customers While You Turn a Profit Jim Semick, ProductPlan
  • 2. 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 management @jimsemick 2
  • 3. 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 3
  • 4. Poll In your organization, who determines pricing? • Product Management • Marketing • Sales / Finance • Other 4
  • 5. More opportunities than ever to differentiate through pricing 5
  • 6. Traditional Software Pricing Limited pricing model options Perpetual license fees, enterprise server licenses…etc. Maintenance agreements Upgrade fees Disconnected from the value proposition 6
  • 7. Software Pricing: A New World Dozens of new models Subscription-based Service often included Always updated A part of the value proposition 7
  • 8. 8 So Many Pricing Flavors Per-user User+Free (G2M, ProductPlan) Storage (Dropbox) Features / packages Project (Basecamp) Per item/contact (AppFolio) Freemium (LinkedIn) Data / Processor time (AWS) Per-node/server (Hadoop) Per visitor/traffic (AdRoll) Open Source (Red Hat) Advertising (Facebook) Broker (AirBnB) …and many more
  • 9. 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… 9
  • 10. Align Pricing With Customer Value 10
  • 11. Quantitative Value Cost Savings Time Savings Increased Revenue Meet Business Objectives 11
  • 12. Qualitative Value Reduced frustration Lifestyle benefits Reduced risk (sleep better) Looking good (social benefit) 12
  • 13. Estimate Lifetime Value Early 13
  • 14. LTV > 3* CAC Customer Acquisition Cost 14
  • 15. Pricing is a Part of the Product When is the Right Time to Set Pricing for New Products? 15
  • 16. Poll For your last product launch, when was pricing determined? • Before development • During development (e.g. during Beta) • Immediately before Launch • After Launch 16
  • 17. Typical Pricing Model Decisions 17
  • 18. Move Pricing Validation Earlier 18
  • 19. Case Studies 19
  • 20. Easy to understand vs. competitors Resonated with customers Success-based – pay more as business grows Additional revenue through value+ services 20
  • 21. “All You Can Meet” Unlimited meetings No “overage” charges How did we decide pricing? 21
  • 22. 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) 22
  • 23. Qualitative Value Motivates Lifestyle benefits from conducting meetings remotely Reduced frustration switching to an easier-to- use solution Reduced pain from switching to easier-to- budget solution 23
  • 24. Case Study 24
  • 25. 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 25
  • 26. Jim Semick Twitter: @jimsemick Email: jim@productplan.com (email me for slides) Join the conversation and learn more: Website: www.productplan.com Blog: 3 new articles on pricing Webinars: Tomorrow: “Building Better Roadmaps” Plus: Product Mgmt Articles, Free Product Trials and More! 26 @productplan
  • 27. More Information Contacts: • Stacey Weber sweber@pragmaticmarketing.com @pragmaticmktg 27
  • 28. Thank you for attending! Download this webinar and sign up for more at pragmaticmarketing.com/live

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