🗒️ Community Notes 4.7
Self-serve volume discounts, private vs. public pricing strategies, and more.
Happy Friday y’all!
A big welcome to the new members who joined since last send:
Joshua Herzig-Marx, PM Coach and Mentor at Supra (Boston)
Jevon McDonald, Co-Founder of Tier (Canada)
Matt Shapiro, Director of Investments at York.ie (Boston)
Lee Smith, Co-Founder/Head of Commercial Development at AcuityMD (Boston)
Ben Morgan, SVP of Pricing Strategy at FIS (London)
Evan Grubb, Account Executive at Paddle (Grand Rapids for now)
Every Friday(ish), I’m aiming to use these emails to recap the best conversations happening in the community so you don’t miss a beat.
If you haven’t requested access to join the private LinkedIn Group, please do so here.
Let’s get to it!
First up, Charlie brought up the idea of self-service volume discounts.
Some of my favorite ideas explored in the comments:
One challenge with PLG is when prospects will come through ‘contact sales’ that aren’t big enough to justify sales involvement, but are too big for the existing self-serve motion. Charlie’s question gets at how to serve these folks. Simply put, it’s complicated.
Offering public volume discounts may help, but there are downstream implications — it gives Enterprise customers reason to expect heavy discounts.
If you keep the volume discounts low, they may not be enticing enough and those prospects will just contact sales anyway. For instance, would a 5% discount actually be compelling enough to drive a self-serve purchase?
Dig deeper on the full post here.
Next, Kyle raised a great question about how pricing strategy changes for public vs. private companies.
While I couldn’t find any resources explicitly about this, I do have some experience with it. I was in Sales when Hubspot went public, and one big focus was operationalizing discounting and ensuring we had discipline there.
While we didn't change our actual pricing model, we did put more rigor behind discounting, including:
☑️ Capping discount levels
☑️ Requiring different tiers of approval for discounts with our SVP of Sales needing to sign off at the highest level
☑️ Tying discounting to performance/promotions for Sales Reps, Managers, etc.
The biggest takeaway that I remember is in hindsight our days as a private company felt like the Wild West.
Beyond sales, some other things that Kyle and I mentioned that could be impacted are:
PR/Communications around pricing changes and how it impacts analyst perception
Making life easier for Finance/Accounting
The bigger takeaway that I’ve been thinking about is hopefully your pricing model is in a good enough place that it doesn’t need to change when you go public, but more needs to be put into how pricing impacts everything else.
If anyone has any other thoughts or feedback on this, I’d love to hear it.
That’s it for this week. Hope you all have an amazing weekend. If you have peers or colleagues that should join the Good Better Best, please spread the word!