Marketing Panel Innovative Pricing & Packaging Strategies

Brian Bell CMO

Joe Andrews Sr. Director, Product Marketing

@andrewsjoe @brianbell123

In The Subscription Economy, Focus Is On Relationships

Product Relationships

BUY NOW SUBSCRIBE

Three Strategic Growth Levers in Subscription Based Businesses

Increase  Value  of  Your  Customers  

Reduce    Churn  

Acquire    New  Customers  

$

PRICE   ITERATE  

Pricing and Packaging Supports Your Key Growth Strategies

How Do I Get My Arms Around My Pricing Strategy?

CMO

How do I balance growth & revenue?

How  to  I  think  about  choice  vs.  simplicity?  

Do  I  price  for  new  accounts  or  exis@ng?  

How  do  I  price    vis-­‐à-­‐vis  compe@@on?  

How  do  I  improve      Time-­‐To-­‐Market  &  opera@onalize?  

Pricing in Product World

Cost  

Price  

TIME  

$  

PROFIT  

In the Subscription World, Pricing is Based on Recurring Usage

Four Basic Subscription Price “Metrics”

1.   One-­‐:me  

1.   One-­‐:me  (setup)    2.   Fixed  recurring  3.   Per  unit/user  4.   Usage  models    

Relationships

Product

Consumers Have Unique Needs

It’s a Competitive, Dynamic Market

The Challenge: Where to Focus and Start?

Company Launch

International Growth

Revenue Enhancement

Product Expansion

Pricing Optimization

BUS I N E S S   MATUR I T Y  

CO

MP

LE

XI

TY  

Product  Upgrade  

Different  Billing  Frequencies  

Simple  Monthly  Recurring  

Product  Bundles  

Add-­‐On  Products  

A/B  Tes@ng  

Usage  &  Overage  

Pricing  Tiers   Regional  Pricing  

Mul@ple  Currencies  

This is Not Where to Start

Continued…

Continued…

And Continued Again…

Start Simply, Then Iterate

1   2   3  Simple  Recurring    Model  

More  Advanced  Op:ons  

Basic  Itera:ons  

Consider Fixed Recurring Model to Start

Focus  on  Core  Value  Prop  for  Target  Customers  

As You Iterate, Add More Basic Options

1   2   3  Simple  Recurring    Model  

More  Advanced  Op:ons  

Basic  Itera:ons  

Use a Promotional Strategy

Offer  Full  Trials  to  Drive  Adop:on  

Consider a Freemium Strategy

Give  Away  Base  Product  to  Rapidly  Acquire  Customers  

Bundling Strategy

Offer  Flexibility  &  Cross-­‐Sell  Offerings  

Longer-Term Options to Lock in Customers

Reduce  Churn  &  Increase  Commitments  (TCV)  

More Advanced Options

1   2   3  Simple  Recurring    Model  

More  Advanced  Op:ons  

Basic  Itera:ons  

Usage Based Pricing

Pay  as  You  Go  &  Limit  Risk  For  Customers    

International Pricing US  Pricing  A Asia  Pricing  B

Address  Different  Market  &  Segment  Requirements  

Testing & Iterating

Op:mize  Both  Promo:onal  and  Core  Pricing  Strategies  

ITERATE  

Be Mindful When Making Changes

27  Talk  to  Customers  &  Communicate  Changes  Effec:vely  

Lessons From Our Customers 1.  Pricing and packaging is a new strategic weapon

2.  Start simply…then iterate with more basic strategies

3.  Four basic pricing metrics for subscription businesses

4.  Leverage a free promotional strategy

5.  Test, test, test

6.  Be mindful of communicating and deploying changes to your customers

Meet the Panelists

Demandbase Greg Ott, CMO

Fuzebox Eran Shtiegman

VP Product

Insideview Brian Kelly

CMO

Zuora Brian Bell, CMO

@brianbell123

MuleSoZ  Chris  Purpura  

VP  &  GM  @chrispurpura  

Marketo  Bill  Binch  SVP  Sales  

@bkkelly  

END