Pricing and packaging your software does not have to be hard.
For the past 6 months, I’ve been thinking a lot about pricing and packaging technology products. Pricing and packaging a software product is one of the most important aspect of building a product or even a company (assuming it’s a one product company) yet most senior product executives and CEOs think of pricing and packaging as an afterthought.
I kept wondering why companies continue to struggle with pricing and packaging their products. So, I spoke with key leaders in my network and spent a few months discussing with them. Here are the top reasons why pricing/packaging exercise seems more complex than it needs to be:
- Underestimating the effort and time to create and to get buy-in across the organization.
- Wasting time in “Analysis-Paralysis”
- Focusing only on new customer acquisition and forgetting about renewals and upsells.
- Failure to enforce the current process and blaming the sales teams.
- Afraid to change the status quo.
There’s much research to be found on pricing strategies, especially for SaaS products, so I won’t write about it here. But if you get a chance to read it and spend some time thinking about it, you’ll find that most of it is driven by consulting. And software products/tools that do exist, typically are solving the monetization problem through CPQ tools, billing and contract management systems like Zuora, Intacct, Oracle Financials, SAP, Chargify, Chargebee etc. But no one really thinks about the poor product marketing manager or product manager who has to put together a pricing/packaging structure and is held accountable for it’s success. When in fact, that person is not acting alone.
Now, imagine if there was a product/tool that allowed you to:
1. Save 50%-75% of the time, effort, and cost to launch new pricing.
2. Quickly create a pricing tool for the packages.
3. See which customer in your pipeline is likely to buy the product.
4. Communicate and collaborate with stakeholders (Finance, Sales, Product Management, Development, Legal etc).
5. Identify up-sell opportunities and improve renewal rates to increase retention and customer success.
6. Integrate with billing and contract management to optimize the financials of your business.
Is that something you’d be interested in?
Would love to hear your thoughts, so please feel free to comment. I’ve also created a quick survey of 8 questions, to collect additional comments/feedback. Would appreciate your feedback!
