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Patrick Campbell, CEO, Price Intelligently - Monetization: The Forgotten Growth Lever

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Price Intelligently CEO, Patrick Campbell spurs monetization as an important lever for growth and provides actionable pricing advice to monetize better. Visit: http://tractionconf.io

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Patrick Campbell, CEO, Price Intelligently - Monetization: The Forgotten Growth Lever

  1. 1. Monetization: The Forgotten Growth Lever October 8, 2015 @PriceIntel
  2. 2. You’re focused too much on acquisition as a driver of growth. @PriceIntel
  3. 3. 1. You’re exceptionally inefficient with your growth 2. You’re leaving customers and revenue on the table @PriceIntel
  4. 4. Bold claim. @PriceIntel
  5. 5. We’ve seen inside more SaaS companies than anyone else on the planet. @PriceIntel
  6. 6. All the financial data for 1012 SaaS companies. @PriceIntel
  7. 7. Qualitatively, two main camps of SaaS emerged. @PriceIntel
  8. 8. LTV Beasts. @PriceIntel
  9. 9. 1. Small to no sales team 2. Typically low amounts of funding relative to their size 3. Focus on unit economics and buyer personas above all else @PriceIntel
  10. 10. CAC Fiends. @PriceIntel
  11. 11. 1. Large sales teams 2. Raised more money than God 3. Unit economics not top of mind and vague buyer personas @PriceIntel
  12. 12. Is this real? Is this driven by our growth culture? @PriceIntel
  13. 13. Looked at 10,432 blog posts. @PriceIntel
  14. 14. We love our acquisition @PriceIntel 0% 25% 50% 75% 100% Acquisition Monetization Retention %oftotalarticles Category of growth articles written in 2014 and 2015 N = 10,432 blog posts written in 2014 and 2015
  15. 15. Acquisition isn’t the most effective channel @PriceIntel
  16. 16. If we improve each lever by the same amount, which lever causes the most growth? @PriceIntel
  17. 17. Impact of improving each growth lever @PriceIntel 3.32% 0% 5% 10% 15% Acquisition Monetization Retention %impactonthebottomline Impact of improvingeach lever by 1% N = Data from 512 SaaS companies
  18. 18. Impact of improving each growth lever @PriceIntel 3.32% 6.71% 0% 5% 10% 15% Acquisition Monetization Retention %impactonthebottomline Impact of improvingeach lever by 1% N = Data from 512 SaaS companies
  19. 19. Impact of improving each growth lever @PriceIntel 3.32% 12.70% 6.71% 0% 5% 10% 15% Acquisition Monetization Retention %impactonthebottomline Impact of improvingeach lever by 1% N = Data from 512 SaaS companies
  20. 20. Improving retention and monetization has 2- 4x the impact of focusing on acquisition. @PriceIntel
  21. 21. 1.68 3.23 11.09 0 5 10 15 No pricingfunction Yearly pricingreview Continual price optimization LTV/CAC vs. Pricing Commitment Impact on efficiency 2015 survey of 96 SaaS companies with ARR greater than $5M
  22. 22. We’re like a dog chasing a car. We want customers, but don’t know what to do when we get them. @PriceIntel
  23. 23. We focus on growth as a sledgehammer. @PriceIntel
  24. 24. How do we improve monetization? @PriceIntel
  25. 25. 3 ways to better monetization • Quantify you buyer personas • Implement a pricing process • Utilize a multi-price mindset
  26. 26. Quantify your buyer personas @PriceIntel
  27. 27. Persona-Pricing Fit Table Stakes Tony • Valued features: • SFDC Integration • Chrome extension • Least valued features • Analytics • API access • WTP = ~$10/month • CAC = ~$22 • LTV: $160 Advanced Arnie • Valued features: • Analytics • API Access • Least valued features • Chrome extension • Premium support • WTP = ~$25/month • CAC = ~$56 • LTV: $325 @PriceIntel
  28. 28. Basic Plus Premium $49 $149 $299 I  only  have  one  cool   feature. The  same cool  feature. Yup,  same  one. Oh!  You  can  only  get   this here. Well…and  here. Huzzah!  I’m  the  plan   with  absolutely   everything. @PriceIntel
  29. 29. If you don’t know who you’re driving to this page, how do you know what to put on this page? @PriceIntel
  30. 30. Implement a pricing process @PriceIntel
  31. 31. What’s the average amount of time spent on pricing amongst SaaS companies? @PriceIntel
  32. 32. ~8 Hours. Total. @PriceIntel
  33. 33. Companies lack Companies spend an average of 8 hours total on pricing, but spend hundreds of hours on acquisition.* Commitment Expertise Process No one is hired or trained to manage the pricing process, getting handed off to “whomever wants to take the project.” Pricing is treated as “argue, guess, and check”, rather than a validation process engrained in customer development. *2015 survey of 312 SaaS companies @PriceIntel
  34. 34. Pricing Isn’t Hard. @PriceIntel
  35. 35. It’s a process. @PriceIntel
  36. 36. Need to evaluate every 3 months and make changes every 6 months. @PriceIntel
  37. 37. Changing Your Pricing Customer/Market Research Communication Plan Week: 1 2 3 4 5 6 7 8 9 Impact Analysis Customer Advisory Panel Implement Changes Step:
  38. 38. Your Pricing Committee Main Decision Maker (could be a member of the committee, as well) Main Coordinator Typically in Product or Marketing Product Leadership Corp Dev/Finance Sales Leadership Marketing Leadership
  39. 39. Utilize a multi-price mindset @PriceIntel
  40. 40. @PriceIntel
  41. 41. @PriceIntel
  42. 42. Basic Plus Premium $49 $149 $299 I  only  have  one  cool   feature. The  same cool   feature. Yup,  same  one. Oh!  You  can  only  get   this here. Well…and  here. Huzzah!  I’m  the  plan   with  absolutely   everything. Differentiate Features @PriceIntel
  43. 43. Pricing 101 Wistia @PriceIntel
  44. 44. A value metric is what you charge for, and should: 1. Align to your customer’s needs. 2. Grow with your customer. 3. Be easy to understand. Pricing 101 @PriceIntel
  45. 45. Acquisition is important, but you need to monetize effectively. @PriceIntel
  46. 46. http://priceintelligently.com/TractionConf Patrick Campbell Patrick@priceintelligently.com Slides @PriceIntel @Patticus @PriceIntel

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