The Keys to Pricing Implementation
Q&A with Maple Street's Pat Meegan.
SaaS Pricing Pulse
Slack introduced an AI add-on to the Pro and Business+ plans.
Confluent dropped the entry price-point on its Standard plan.
Pipedrive added Customized Onboarding to its Essential plan.
Mixpanel raised the entry price on its Growth plan and specified a 1T event limit for data warehouse ingestion on the Enterprise plan.
Trello added Atlassian Intelligence AI to its Premium plan.
PS. Wondering where these alerts come from? I spotted them using PricingSaaS. We monitor thousands of pricing pages to surface trends, collect examples, and make pricing research simple.
Welcome new subscribers, and happy Friday!
This is the final post in a 4-part series with team at Maple Street Advisors. Here are links to parts I, II, & III. If you are currently working on pricing and packaging, take the Maple Street Pricing Strategy Assessment to identify whether your company has an opportunity to improve your pricing and packaging strategy.
Housekeeping note: This will be the last post for a month or so, as I’ll be off on self-imposed paternity leave. When I get back, the focus of the newsletter will be sharing and analyzing recent moves by PLG leaders. The SaaS pricing landscape is more active than ever, and I look forward to getting back to analysis.
The Keys to Pricing Implementation
As a Strategist at ProfitWell, ~90% of my clients asked if we could help with implementation after we delivered recommendations. While that wasn’t part of our offering, it’s one of the most important parts of a pricing change.
Luckily, Pat Meegan and the team at Maple Street Advisors do offer implementation services (congrats to Maple Street btw, they were just acquired by IGS!).
Last week, I caught up with Pat and got him to share his secrets.
Rob: What is the biggest challenge you see when clients implement a new pricing strategy?
Pat: I don’t think there’s one specific challenge, but the biggest ones I’ve seen typically fall into four buckets:
Sales: Rep behavior will change, and this is often underestimated. I’ve actually worked with a few clients that used this opportunity to re-train their reps on value selling, which I thought was a genius idea to avoid reps reverting to their old ways.
Marketing: Specifically reframing the website positioning to align with the updated pricing, packaging, and positioning. This is obviously a bigger priority for PLG companies than those with a sales-led motion, but important regardless.
Systems: Specifically, how long will it take to execute implementation given the back-end technology a company is using. This can make a massive difference, and importantly — there will almost always be delays. It’s essential to make sure the team is aware of this beforehand, and stakeholders have realistic expectations.
Discipline: This comes down to factors like price integrity, discounting guidance, deal desk, and processes to ensure sales is selling based on value. The least effective approach I have seen is when a company gave its reps the choice to sell on the old pricing or the revised model. Pretty much every rep had justification for why they couldn’t sell at the increased price, and reverted back to selling at a lower price because there weren’t controls in place.
Rob: What are some helpful practices companies can follow to have a smooth implementation?
Pat: Whatever amount of time you’ve set aside, you’re going to need to spend more time on implementation planning than you think. That doesn’t mean get into analysis paralysis, but if you start thinking about each part of the implementation, you’ll find there are things you can anticipate that save you from taking a ready-fire-aim approach. Similar to the last question, I think about these in buckets. Some of the most impactful practices I’ve seen are:
Rollout Incrementally: The most successful implementations I’ve seen have started with a Pilot phase, which the company used to check and adjust before a wider rollout. During this phase, it’s key to pay attention to both sales rep feedback and market feedback. On the sales side, you want to understand what they are most nervous about, and how that plays out in live calls. On the market side, you want to understand the reaction from a limited set of prospects or customers before going all-out with the launch. This strategy is particularly effective if there are some pretty big unknowns with the rollout, or if it’s the first time you’ve been through a meaningful pricing change. There are several ways to design the pilot – one vertical, one product, start with existing customers that are low risk, start with smaller customers that are more transactional, smaller dollar customers, etc. Again, this goes back to the planning part, create a plan that makes sense, then see how the market responds.
Monitor Results: Make sure to look at both qualitative information and quantitative metrics.
On the qualitative side, make sure you’re paying attention to what sales reps are saying. Also, listen to Gong calls to hear how they’re positioning the new pricing and ensure they’re selling for value. Reps will have habits based around the old model, so there’s personal risk for them shifting to the new one. You want to make sure that what they’re telling you about the new pricing squares up with how they’re positioning it in sales calls, and Gong is a great place to understand that.
On the quantitative side, pay attention to the usual suspects, like ACV, but also make sure to monitor shifts in package distribution, along with sales-related metrics like win-rate, discount rate, and days-to-close. Collecting quantitative indicators is critical to keeping emotions in check.
Rob: How do you enable the front lines teams for a strong rollout?
Pat: In the absence of clear direction, sales reps will do whatever is advantageous to them. Without guidance, what the rep chooses to do could be great, but it could also be terrible. I’ve seen reps go out there and start making stuff up, I’ve seen other reps use a pricing change as a really effective way to drive urgency and close deals in the short term. There are a few things I think any front-line leader should do when implementing a pricing change:
Give clear direction. It’s essential to bridge your sales team from old to new pricing and map out the why. These soundbites will likely make their way to potential customers, so it’s critical to make sure all reps have the same approach. The story should be about incremental or enhanced value, not about cost – it’s about how the seller is enabling the buyer to deliver better outcomes and address their problems.
Tune out the noise. Make sure to give reps the chance to provide feedback as they start rolling out new pricing, but keep in mind that there will definitely be people that are vocal and wrong. Check the feedback against the data you had, maybe something wasn’t known at the time, the market changed, or something else. Also, make sure you use the pilot to gain the data needed to make changes, rather than making whiplash moves.
Double down on value. As mentioned previously, price changes are a great time to re-train reps on core value-selling tactics. Your best reps will already be doing this, but it’s a great excuse to get lower performing reps on the same page.
Lastly, I highly recommend putting together a pricing enablement playbook. We do this for clients, but internal teams can do the same thing to help highlight any specific strategies for positioning, delivery, and tools to use in various situations.
Rob: Who should drive pricing implementation?
Pat: Big caveat here because every organization is different, but I generally think there are three teams that absolutely need to be involved
Sales Leadership: Because sales will execute it, and gather feedback.
Product Leadership: Because product will also be gathering feedback on product usage and market feedback.
Finance Leadership: Finance will be objective and monitor results, holding both accountable.
In general, you need someone who owns the product, someone who owns the selling motion, and someone who owns the numbers. Other leaders can join, but I’d consider them nice-to-haves.
That’s all for today. Thanks for reading! And big thanks to Pat and the Maple Street Advisors team. Reminder to take Maple Street’s Pricing Strategy Assessment to identify pricing opportunities at your company.
Whenever you’re ready, there are a few ways I can help you:
PricingSaaS Software: AI-powered pricing alerts for PLG SaaS companies.
PricingSaaS Services: Rapid research and ongoing support for growing SaaS companies.
Pricing Coaching: Schedule a call with me to talk through your pricing challenges and determine the best course of action.
We all talk about pricing & packaging as the great lever of growth that companies too often under-utilize. But what those statements usually don’t highlight is the underlying systems problem that makes it incredibly complex and expensive for operators across product, engineering, and ops to achieve control of & flexibility with their pricing & packaging. Great to see this discussion highlight those challenges!