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Innovative Pricing and Packaging Strategies


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Are you wondering how to price and package your services to drive up revenue and customer acquisition? Here is a teaser: It could be tiered pricing, charging for usage, upgrade plans, or segmented pricing, but finding the right pricing combination makes the difference.

Innovative Pricing and Packaging Strategies

  1. 1. Why Zuora Zuora Provides a BluePrint to Succeed in the Subscription Economy! The Marketing Perspective: Innovative Pricing & Packaging Strategies
  2. 2. 2 Joe Andrews Sr. Director, Product Marketing Zuora Mike Puglia Vice President, Marketing Timetrade Our Speakers @andrewsjoe @timetrade
  3. 3. We call this shift the Subscription Economy™ Our world is shifting ShippingProducts Monetizing Relationships BUY NOW SUBSCRIBE The Subscription Economy takes the changes brought by the SaaS model and applies them to companies in every industry.
  4. 4. Three Strategic Growth Levers in Subscription Based Businesses Increase Customer Value Reduce Churn Acquire New Customers
  5. 5. 5 CMO How Do I Get My Arms Around My Pricing Strategy? How do I improve Time-To-Market & operationalize?How do I improve Time-To-Market & operationalize? How do I balance growth & revenue? How do I price vis-à-vis competition? How to I think about choice vs. simplicity? Do I price for new accounts or existing?
  6. 6. 6 Pricing in Product World Cost Price TIME $ PROFIT
  7. 7. 7 In the Subscription World, Pricing is Based on Recurring Usage
  8. 8. 8 Four Basic Subscription Pricing “Metrics” Product 1. One-time 1. One-time (setup) 2. Fixed recurring 3. Per unit/user 4. Usage models
  9. 9. 9 Consumers Have Unique Needs
  10. 10. 10 It’s a Competitive, Dynamic Market Pricing and Packaging is Now a Powerful and Strategic Weapon
  11. 11. 11 The Challenge: Where to focus & start? Company Launch International Growth Revenue Enhancement Product Expansion Pricing Optimization BUSINESS MATURITY COMPLEXITY Product Upgrade Different Billing FrequenciesSingle Product Simple Monthly Recurring Product Bundles Add-On Products A/B Testing Usage & Overage Pricing Tiers Regional Pricing Multiple Currencies
  12. 12. 12 This is Not Where to Start
  13. 13. 13 Continued…
  14. 14. 14 And Continued Again…
  15. 15. 15 Start Simply & Iterate 1 2 3Simple Recurring Model More Advanced Options Basic Iterations
  16. 16. 16 Consider Fixed Recurring Model to Start Focus on Core Value Prop for Target Customers
  17. 17. 17 As You Iterate, Add More Basic Options 17 1 2 3Simple Recurring Model More Advanced Options Basic Iterations
  18. 18. 18 Use a Promotional Strategy to Acquire Customers Offer full trials to drive adoption Offer Full Trials to Drive Adoption
  19. 19. 19 Consider a Freemium Strategy Give Away Base Product to Rapidly Acquire Customers
  20. 20. 20 Freemium Considerations • Put your best foot forward • Take away, don’t offer “more” (less unhappy customers/refunds) • Embrace “free” • How do you end a trial?
  21. 21. 21 One-Time Promotions Change Purchase Behavior Offer full trials to drive adoption
  22. 22. 22 Bundling Strategy Offer Flexibility & Cross-Sell Offerings
  23. 23. 23 Bundling Strategy – By Market/Vertical
  24. 24. 24 Longer-Term Options to Lock In Customers Reduce Churn & Increase Commitments (TCV)
  25. 25. 25 More Advanced Options 25 1 2 3Simple Recurring Model More Advanced Options Basic Iterations
  26. 26. 26 Usage Based Pricing Pay as You Go & Limit Risk For Customers
  27. 27. 27 Usage Based Pricing With Overage Balanced Risk For Customers & You
  28. 28. 28 Regional Pricing Strategy US PricingA Asia PricingB Address Different Market & Segment Requirements
  29. 29. Test Pricing/Packaging Changes 29
  30. 30. 30 Be Mindful When Making Changes Talk to Customers & Communicate Changes Effectively
  31. 31. 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 Summary of Lessons From Our Customers
  32. 32. 32 code: “webprice” 50% off registration price through Aug 31
  33. 33. 33 Joe Andrews Sr. Director, Product Marketing Zuora Mike Puglia Vice President, Marketing Timetrade Questions? @andrewsjoe @timetrade
  34. 34. 34