Monika Saha, VP of Product Marketing for Zuora, the world’s leading provider of subscription billing, commerce, and finance solutions, outlines how to design your subscription pricing growth journey, select pricing variables, and maintain a healthy pace of pricing and packaging innovation.

1. Lessons Learned When Monetizing Subscription
Services
Monika Saha : VP Product Marketing,
Zuora

2. Topic
 Lessons, Observations & Suggestions - 30 mins
○ Designing growth journeys
○ Selecting pricing variables
○ Maintaining a healthy pace of innovation
 Audience Q/A - 15 mins
Agenda

3. Lessons, observations, suggestions
when designing pricing and packaging
01Designing “growth
journeys”
02Single vs. multiple value
metrics
03Maintaining a healthy
pace of innovation

4. Healthy upsell revenue is critical to growth
% of bookings from upsells
Source: 2016 Pacific Crest SAAS survey
Cost of new business vs. upsell, expansion,
renewals

5. Challenge : Balancing acquisition vs. lifetime value
B2B
Pressure to
meet quotas
Higher bookings
numbers
Lower net dollar
retention
B2C
“Blind”
discounts/pro
motions
acquire a high
volume of
subscribers
Higher subscriber
growth rates
Lower post-
promotion
retention

6. Suggestion: Design for 2 factors to drive
upsells/expansion
Current
ARR/M
RR
Capability
driven
growth
levers
Consumptio
n driven
growth
levers
New
ARR/M
RR
a.Capability-driven: The need for an
expanded set of product capabilities
(cross/upsell)
a.Consumption Driven: Higher use and
adoption of a base set of capabilities
that a customer has bought (add-on)

7. Suggested packaging framework
EDGE NEEDS
Identify new capabilities customers
may want as their needs begin to
extend beyond baseline needs of
their profile
Map this to
baseline
packages
Map this to
capability
driven growth
(tipping
points,
cross/up
sells)
Map this to
consumption
driven growth
(add-ons)
COMMON NEEDS
Define the most common pricing
profiles and
the “baseline needs” of those
profiles
ADOPTION
SIGNALS
Identify signals that indicate higher
adoption of the same set of
capabilities over time
⇊
optimal packaging

8. Challenge : maintaining compelling “tipping points”
Benefit A $10
Benefit B $5
Add-On
Creep
Weak
Tipping
Point
Benefit A
Benefit B
Benefit C
GOLD
PLAN
$150/user/yr
BRONZE
PLAN
$100/user/y
r
Compelling
Tipping
Point
BRONZE
PLAN
$100/user/y
r
GOLD
PLAN
$150/user/yr
Benefit A
Benefit B
Benefit C
You might start here …. But over time you could end up here
….

9. Suggestion: carefully consider the “value-optics” of
add-ons
Benefit A
Benefit B
Benefit C
GOLD
PLAN
$150/user/yr
BRONZE
PLAN
$100/user/yr
(A + B) $50Tipping point
advantage
This solves for a need to offer add-ons A & B with the bronze plan, without eroding the
price-value tipping point of the Gold Plan

10. Lessons, observations, suggestions
when designing pricing and packaging
01Designing “growth
journeys”
02Single vs. multiple value
metrics
03Maintaining a healthy
pace of innovation

11. We are seeing an increasing number of
value metrics
Source: 2016 Pacific Crest SAAS survey

12. Challenge : selecting a value metric for complex,
mature, cross-departmental products
You might be leaving money on the table
Buyers will have a hard time aligning price to value
delivered
✕
✕
A single value metric is ideal, but sometimes not every product innovation will map to this
value metric
Without the right value metric:

13. Value Metric : # Of Sales Users
100M 10M
1M
CFO Value : Transactions
automated
VP Sales Value : Quotes streamlined for
users
Suggestion: map one value metric per
persona
Value metric : transaction
volume

14. Lessons, observations, suggestions
when designing pricing and packaging
01Designing “growth
journeys”
02Single vs. multiple value
metrics
03Maintaining a healthy
pace of innovation

15. Challenge : keeping up with a continuous innovation
cycle
Over-loaded add-ons
Eroded price-value differentiation
✕
✕
Pricing/Packaging decisions have to be made at a faster, more frequent pace
The pitfalls of not aligning the pace of pricing/packaging innovation with product innovation:

16. Suggestion: create an innovation alignment
framework
PRIMARY PRICING GOAL
Product
Innovation
Benefits
Competitive
play
Reduce
sales/acquisiti
on friction
Generate new
business
revenue
Generate
upsell/expansi
on revenue
Increase
package
differentiation
Benefit name 1 +
Benefit name 2 +
Benefit name 3 +
Benefit name 4 +
Benefit name 5 +
Force yourself and your primary stakeholders to attach ONE primary pricing goal to each
benefit

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