Episode Transcript
[00:00:00] Speaker A: We were selling a vitamin at the time. It wasn't a painkiller, and people didn't prioritize it in their business. And so, you know, we really had to get creative with how we started to talk about it and how we chased folks that were feeling the pain because fraud was starting to infiltrate the industry. And then that started to change the dynamic a little bit.
[00:00:21] Speaker B: Yo, Mike check. What's up, everybody? You're listening to the street pricing podcast, the only show where proven SaaS leaders share their mindset and mistakes in pride pricing. So we can all stop guessing and start growing. Enjoy. Subscribe, and tell a friend. Now, let's break it down with your host and sought after slayer of bad pricing, Marcos Rivera.
[00:00:44] Speaker C: What's up, and welcome to the street pricing podcast. I'm Marcos Rivera, founder, author, and pricing coach, and today's guest. I love because I just feel safer knowing that he's out there fighting fraud, fighting for us. All right. You're gonna love this episode. There's a lot to unpack here today. I have co founder and CEO of Certified, Tyler Adams. Tyler, welcome to the show.
[00:01:05] Speaker A: Yeah, thanks for having me, man. I'm excited. It's been a little while since I've seen you.
[00:01:09] Speaker C: Yeah, it's been a minute, man. We're gonna talk more. Cause we spend a lot of time together talking through all sorts of great pricing, monetization, fraud stuff. I mean, you taught me a lot about fraud, too, man. Now I'm more paranoid than ever. But do me a favor, man, real quick. Just tell everybody a little bit about you and what you do.
[00:01:25] Speaker A: Yeah, sure. So, Tyler Adams, co founder and CEO, certified. We help prevent wire fraud focused mostly in real estate transactions today, but are starting to chart our path outside of the real estate industry. And essentially, what that means is, if you are a participant in a real estate closing, either a buyer, seller, acting as someone in escrow, you are the target of one of the fastest growing cybercrimes in the United states. So, fraudsters have figured out that a real estate transaction involves a lot of people that typically haven't met face to face. And in a really short period of time, they got to establish trust and they got to move a lot of money in order for that transaction to close. And so fraudsters have started to infiltrate that with business, email compromise, and other tactics that lead to really good people losing a lot of money. And so our software is meant to help verify the identities of everybody involved in the transaction and then safely and securely get that money transmitted from point a to point b and so we ensure every dollar that moves through a real estate transactions for our customers. So it's been a very fulfilling journey. It's had a lot of twists and turns along the way, but unfortunately, fraudsters continue to find interesting ways to beat consumers and businesses. And we're trying to do our best to stay one step ahead or at least a half step behind to try to help and reduce risk for everybody involved in real estate today.
[00:02:56] Speaker C: Oh, man. And not easy either, because they'll always keep evolving, coming up with new tricks and. You blew my mind. Just how much is going on out there? Like, can you remind me the number of how much wire fraud and stuff that happens every year?
[00:03:08] Speaker A: Yeah. Yeah. So last year, the FBI runs a report called the IC three. It's the Internet crimes report. And last year, $12.5 billion were sent to criminals. And that's reported. So that's the other thing is that the FBI always says, like, there's likely a lot more out there than what gets reported. And that's across. Like, you know, romance scams have never been higher than they are today. Everybody thought that, like, the egyptian prince is over, but actually romance scams are still, like, one of the largest buckets, or investment scams in general, where people are being convinced to participate. Then there's business email compromise, which is another big bucket. And then, like, support, tech support, and the fake phone calls from your bank, or fake phone calls from Norton antivirus. All of those combined lead to $12.5 billion that consumers and businesses sent to fraudulent entities last year.
[00:04:01] Speaker C: That is nuts. And you're right, it's probably higher than that because of what's not reported or what's not known.
[00:04:06] Speaker A: Yeah. The businesses, they don't want to tell you that they lost somebody's money. That's not good for business.
You know, a lot of times, big businesses especially, will just pay the difference and move on.
[00:04:16] Speaker C: Unbelievable. Unbelievable. So, huge opportunity in front of you. Right? And I think what we're going to unpack today is how do you capture the value of that stuff? Right? Because there's risk and there's psychology and there's framing and there's all these things. And this is going to be a lot of fun to get in with you. So, are you ready to get street with me?
[00:04:31] Speaker A: Yeah, let's do it.
[00:04:32] Speaker C: Let's do it. Let's do it. So, for all the listeners out there, this podcast is based on the book street pricing. So we're going to format it in the same way we're going to start with a rewind, which is a story of a struggle, success in pricing and growth and monetization, and try to keep those juicy details in there because that's where we learn. And then we're going to bring it to play, which is. All right, what's working today? What's really helping you with your monetization efforts? And then we'll go fast forward, which is what's next. Where are you going? Your next wave of growth. That sound good?
[00:05:02] Speaker A: Let's do it.
[00:05:03] Speaker C: All right, man. Let's go ahead and start off with a pricing story. Tyler, what do you got?
[00:05:07] Speaker A: When we think back to when we first entered the market, it was really tough because we entered early, and we entered the market because my co founder runs a large title company. They got tricked. They wired $200,000 to a fraudulent entity. And we ultimately wanted to enter this market to help prevent that from happening to anybody else. Well, in 2017, the vast majority of these real estate transaction deals were done via email, or at least the exchange of the information, like wiring instructions, was done via email. And they just didn't realize that how easy that was to compromise or that fraudsters were going to start coming after them. And so when we went to market with our solution and we started approaching title companies to say, hey, this problem is coming and we can solve it for you. Pay us $10 and we'll verify all of your wires. You know, each wire for $10, they said, what are you nuts? Like, I do this for free via email right now. Why am I going to pay you $10 for insurance and all of this value that you're claiming when I have a free option? That's really easy. And so that was the initial crux of entry into the market where we thought, wow, we're providing a million dollars of insurance. We're providing all of this value to help prevent you from this terrible thing that we had witnessed firsthand from happening. And people were, like, closing the door in our face, like, yeah, buddy, come back next time. Because we were selling a vitamin at the time. It wasn't a painkiller and people didn't prioritize it in their business. And so, you know, we really had to get creative with how we started to talk about it and how we chased folks that were feeling the pain because fraud was starting to infiltrate the industry. And then that started to change the dynamic a little bit.
[00:07:01] Speaker C: Yeah, pain. Pain, right? And here's the thing, right? Is perceived pain and then pain that you actually experience, right? Can really change the way you frame problems. And solutions. Right. I mean, it's the old adage, right? It doesn't, it's not as important to you until it happens. Right. And now you're like, oh, damn right. I wish, wish you would have had that. I wish I would have bought that extra damn coverage on my rental car. I mean, whatever it is, right?
[00:07:23] Speaker A: Yeah.
[00:07:23] Speaker C: But the idea behind it is some folks, when they see it, they see it as that incremental expense, and it's hard to make that almost two levels jump to what that expense is doing to help them. Right. And not the easiest thing. And I know you've probably reframed the pitch and you've kind of maybe also changed who you targeted. How did you start to kind of find your way out of that? Because I bet you there's some entrepreneurs right now who are probably running into that block.
[00:07:50] Speaker A: No, for sure. I mean, our journey, especially when you think about how it, how pricing plays an impact in it, is we thought we were worth a lot more when we went out to market. So when I talk about $10 per transaction, that might not seem like a lot, but in this industry, we felt like that was a compelling kind of equilibrium of what the value was, but also what the willingness to pay was. And the market really quickly showed us that that was not the case. And so we actually dropped our pricing and got even cheaper. And when we were kind of getting initial traction and growth, we were giving away essentially a million dollar insurance policy on every wire transfer being submitted for like less than $5. And what we realized, though, was that that was sort of what was required to get into the market and to educate and to keep telling our story and to keep raising awareness. And then as awareness started to grow, both from what we were doing, but also because people started to experience fraud, either near misses or hearing about a title company or a customer or somebody that, you know, was having that issue. Now we started to see, okay, wait, our value is starting to rise. People are starting to recognize that without a solution like ours, they are at risk. And there was another interesting dynamic that was happening that was like, the insurance companies that ensure this industry started to drop coverage for the type of risk that we were preventing. So we really had to pay attention to, you know, how people were perceiving the value that we provided as a standalone business. But what we didn't know is they were also saying, well, we don't really need you, because if something bad happens, we think our insurance policy, our business, e and o insurance would just cover it. And so once they figured out that their e and o coverage didn't cover it, and they were seeing more and more increases in the threat. We started to see an opportunity where, wait, now the willingness to pay is coming back. Now they're starting to see that the coverage that we provide, the value that we provide, is actually quite significant from what they thought at the beginning of our journey. And so we started to be able to sort of incrementally tick our prices up, or at least that's what we did. At one point, we made a full transition over to like a fully paid subscription model. That part of our story was sort of short lived because we found that this industry really has a lot of seasonality, and they go through months that are feast or famine, and they hated seeing the exact same charge every month for our product in that. So then we sort of had to take another dip in that journey, and we sort of balanced it out with annual license plus transactions. So I'm willing to dig in at any of it. But we have made a lot of changes over the years. And really all of it comes down to trying to make that as tight of a connection between the value and perceived value from our customers and what we were actually charging.
[00:10:45] Speaker C: That is an amazing story outline, because there is something that I think a lot of people can really take away from that, which is value itself is not something that stands still. It can actually morph and change shape. And a lot of it has to do with time and context, which is what you were just describing, right. So over time, the problem started getting maybe more awareness started getting worse that insurance coverage has outside of you guys were changing and not change the dynamic. This goes back to like the old days of there's an old story in pricing world about Coca Cola and how much more you're willing to pay for one on a hot day in the middle of a theme park than if you're at the supermarket, right, on a cold day. So there's these outside things that can really influence value. And if you're really trying to get that tight, I like the way you put it, that tight connection. You got to pay a lot of attention to time and context, I think.
[00:11:41] Speaker A: I mean, that's what we started to realize, too. Like, there's only so much that you can control, and the factors that you control are important, but if you're not perceptive to what else is going on, then you might lose out on an opportunity in either, you know, how you adjust to it from true pricing and packaging, or just even how you speak to it. You know, and that insurance change really helped us because we said, hey, go look at your insurance policy. I bet you're not protected for this risk, and we can actually provide you with that additional protection on every single transaction. And once that started to click, people were like, oh, wow, I didn't realize that the value of our product went up significantly in their eyes. And so, yeah, you got to be attuned to what's happening around your business as well. And sometimes it's other products. Are they buying other products and now they're using it with your product? And how does that work? But for us specifically, it was always a, a sort of interaction between our product and the value that it provided and sort of what they thought they were getting from other insurance products.
[00:12:41] Speaker C: Yeah, well said, man. And I think if I had to summarize it right, there's nothing like value based pricing that really forces you to pay attention. You have to pay attention to everything. All those things you were mentioning, what else are they using the dynamics around at the market? I am. One thing for sure is that when I work with folks, they may not have all the context. And so it makes pricing even harder than it already is. So big lesson for everybody is get that outside context. But you did bring, I gotta admit, man, there's something really that's just causing that itch of curiosity in me. And that was why subscription didn't work with the seasonality. I bet you right now people are wondering like, yeah, how do you do that? Where seasonality factors come in and some parts of the year, it's like super valuable. In some parts of the year they want to freaking cancel it.
[00:13:28] Speaker A: Right?
[00:13:28] Speaker C: So how did you think about that in that one?
[00:13:31] Speaker A: Yeah, so subscription became possible or interesting to us at a certain point when, you know, there's other factors too. Like, shit, billing is even hard. Did you set up billing, right, and are you doing, you know, paper transaction? Are you trying to subscription subscription billing? It's just simply easier in a lot of capacities. Right. It's like a flat fee and it doesn't matter how much you're using. So there was a little bit of a draw for that. There was also the impacts of like, okay, you're going to go fundraise, and as you go fundraise, anyone who's out there just doing, you know, per use usage is going to know that investors are going to have less attractiveness to that model than a model that has a little bit more predictability built into it. And so I think I chased a little bit more of that, like the external market factors. That said, subscription models are better, they're easier, they're more predictable. And it was a point in time when I feel like I didn't listen to my customers as much as I should have because it didn't fit their business as well. And we were just early. And so to try to guess what their subscription should be, because you also have to factor in the fact that we have some variable costs. So as we think about verifying someone's identity, keeping a transaction fraud free, ensuring that transaction, there are variable costs on every single transaction. And so it's not a, you know, one platform, and everyone just logs in and out as many times and there's no additional cost that we're incurring. And therefore, it doesn't matter what the subscription is, it's always going to be, you know, in the green. And so we needed to make sure that that subscription still held some amount of connection back to what we thought their predicted usage was going to be. And that was really hard to do in the sales cycle, was to guess how often are you going to use our product? And it was hard for the customer to sort of predict it. They didn't know what our interest rate's going to be like, how much are people going to buy this year or last year? And like, that has played a role really strongly in the last few years of our industry as well. And so what happened was, and part of it was there was a subsegment of customers that loved it, no doubt, like, hey, same fee all the time. And they felt like the value was there. I think, honestly, I struggled with it a ton, because when you run that report and you look at who's getting a really good deal and who's getting a bad deal, you just had a huge variance where people, you know, bought in at a level and were never really utilizing to that level, or others that bought in at a level and were utilizing way over that level, and the business wasn't mature enough at the time. We didn't have good account management, we didn't have people that were going and really actively trying to calibrate, you know, even at renewal or the year after. And so I think between that feeling of, oh, this is going to be hard to get everybody at the right subscription level. And some of the pushback where we saw customers say, man, I just paid a dollar 250 or dollar 500 a month fee, and like, we hardly did any transactions this month, I just can't justify it. We just sort of saw the writing on the wall that said, okay, maybe this isn't the right model for us, at least for all of our products. And so we pulled back from it, and the next part of our journey kind of led to like partially subscription, partially transaction. That was an interesting part of the journey too, where we actually felt like we had it better in terms of the value equation for the customer, but it was still confusing. And that was another part where we realized like, okay, the value is here, but it is taking us a long time to explain this to a potential prospect of like, well, when you use this part of our product, you're going to get charged per transaction, but this part is all you can eat. So that led us to now kind of where we are today with sort of another iteration of it. But we've been really, I mean, I understand from my background and focus and just how I've sort of seen other companies evolve their business and I treating pricing like a first class citizen and knowing that, like, as your business evolves this new product come, you really gotta be tweaking it and working with it to make sure that the business is growing effectively and in the eyes of the customer, it's servicing them in the way that they expect it to as well. So, yeah, we haven't been shy about changing it. Whether that's been to our benefit or detriment over the years. I'm still, the jury's still out.
[00:18:02] Speaker C: Well, listen, man, that was as raw as it comes, right? You thought it through. There's a, always an opportunity to get closer to the customer. And sometimes in a sea of noise and investors telling you this and others doing that and everything, that guiding light, that beacon should be the customer at the end of the day. And so when you're talking to them, right, you're noticing a couple things, right? There's their seasonality, of course, we talked about. But then there's like this need to stay simple, right? You don't get a lot of tolerance out there for really complicated algorithms in pricing, right? You want to understand, all right, what am I going to pay? What's driving this thing? Cool. And then there's this other part, though, the market dynamics that I think nobody can really get right 100% of the time. Think about, especially your market, now that I think more about it. I mean, there's been some really wild swings in real estate and the number of transactions and home buying. And so you've had to adjust and dodge and weave and take all those things into account as well. Team, I want to take a quick pause here. To ask you for a huge favor that'll mean a lot to me. Please review and share the show. Share it with your team, your friends, your peers. Not only will it help them stop the guesswork in pricing, but it'll also help you and increase the chances that you'll take action and change for yourself. All right, much love. Now back to the show. You guys went down. You marched down. You've made some iterations along the journey, right? Give everybody, like, if you had a step back and you're talking to a group of entrepreneurs, like, what would be the big lesson in that evolution? Because it sounds like it went through different phases, what would be the big takeaway for folks?
[00:19:35] Speaker A: I think my biggest takeaway would have been at least what I think would have made the journey easier from a pricing and packaging perspective, is finding out having we entered a market with a totally new offering that they hadn't ever been exposed to before. But if we had modeled the pricing and packaging off of something that they were already using, I think it would have been sort of an easier entry point, at least in the beginning, even if it led to the changes that we have today. We really wanted to be different. We really wanted to price it in a way that we thought made sense. But there became a lot of education. And so if you're entering a new market, go ask them, what are the other five pieces of software that you're utilizing to build your business or to operate your business? And which one's pricing model do you appreciate the most? Or is the easiest, or is the one that you never think about when renewal comes around, right? Because there's enough things that they are going to want from you in terms of features and changes and better service or whatever it might be, if you can have them not looking at a bill and saying, man, I just don't understand why we're paying this amount, or this doesn't line up directly to what I thought we were getting. It's one less thing that might slow down a renewal or slow down that sales process. And I think that was probably the biggest one for us, is had we gone back and done a little bit more of that research, we could have more closely coupled to other solutions that they were just used to buying.
[00:21:03] Speaker C: That's it. That's it. I always say confused mind never buys, but think about how confusion degrades that ability to pull out the money, right? And that's an area that I think always needs to keep on revisiting. Make sure that everything is clear, because you guys, you didn't just build one thing. You're not just one singular identity or fraud prevention. You guys have expanded over the years and built more stuff. And every time you build more stuff, you gotta rethink that equation, the same value equation you were just mentioning. So let's take it from the rewind to the play right now. You got today, you guys are growing, you're doing great. You're solving all sorts of really great problems in this space. What's really working for you right now with the model you got?
[00:21:46] Speaker A: Yeah, yeah. So when you think about a real estate transaction or any deal, let's say you're buying something, but in our case, you're buying a home. Well, there's buyers and sellers. There's people on both sides of the transaction. And in our scenario, there's also someone sitting in the middle and like escrow, right. And so for any transaction, there's going to be movements of money that are coming in and movements of money that are going out. And our job, or at least the way that we perceive the industry, is how can we protect as many of those transactions as possible? Well, when we started, we were just protecting, like, one of those transactions, it was money moving from the escrow account as a disbursement out to a seller, because that's how my co founder got tricked. He thought he was talking to the seller. It was someone impersonating the seller. And the $200,000 profit that their proceeds, that that seller was intended to receive, he ended up sending it to the wrong place. So we built that. And when we went to the market, we said, hey, we'll charge you $10, and we'll make sure that that payment never goes anywhere but to the seller. Well, then we started figuring out ways to protect the money coming into the buyer. Then we figured out how to protect money going to the real estate agent for, you know, their commissions. Then we figured out how to protect, you have to pay off a mortgage. So now, all of a sudden, there's one deal happening, but certified is being used. Instead of one time. It could be used six times or eight times, depending on the complexity of that transaction. And so what we started to realize was that we had introduced a lot of different products, and they are trying to figure out, okay, I only make so much money off of one deal, and now instead of paying $10, I'm paying ten times five. Is it $50 now that I'm staying with certified? And it's variable, because one transaction might have six movements of money, one transaction might only have two and so there was components of that that was hard for our customers, again, to predict themselves of what was their margin going to be on any particular transaction. And so we really had to work with our customers and also think about not only our product that we have today, but what is the future vision of what we're going to build. And how can we make sure that they're not questioning the value or the experience as we continue to introduce more? Because our goal is for them to consume more, not just because we want them to utilize certified more, but because we want them to truly protect the transaction. And if any one of those movements of money is not protected and they have a fraud, well, it's never a good look if they're using our software for fraud prevention and they fall victim to fraud because they decided not to use it on one of the transactions. And so we were always trying to balance, like, how do you get them to consume more, but without this feeling of like, well, now our margin is going to go down if we use it on a transaction that, like, you know, we feel pretty sure we've worked with this real estate agent a bunch of times. Their information hasn't changed. Maybe we'll just skip using certified on it. Right. And so you're trying to encourage usage, but you're also charging a per transaction fee, which those two things are kind of in conflict, right, versus, hey, here's a platform, use it all you want and get all the value from it. And the more you use it, the more you're going to feel like, wow, that was worth the amount that I paid this month. So that was the real challenge that we had as we added more products.
And now what we've tried to do is balance the per transaction fee with sort of an annual licensing fee fee. So you're able to say, hey, we're not going to charge you a subscription every month that you're paying into, but we are going to ask you to pay up a little bit at the beginning of the year so that then we can balance out those transaction fees and keep a little bit of a healthier dynamic between the two. And the other thing that we did is we realized that a million dollars of insurance on every transaction was a really big value, but that in some cases, people might not need a million dollars of insurance. So was there a way to offer, you know, less insurance for sometimes a cheaper fee? And, you know, that's been really well received by the industry where they feel like they're a little bit more in control and it's not a one size fits all, you know, this is what you get, and we're just going to plug it in. You're going to start utilizing it. So once we figured out that balance between, know, the annual license, having some skin in the game, and then a balance of per transactions, you know, we feel as though it's been, it's been really well received as we've sort of started to go to market. And now they feel in control because they're not getting charged just because there's a deal and certified was used, they're still only getting charged for each protection of money. But it's also at a level that they're not second guessing. Should I use it? On each one of these transactions, they feel confident that they're getting good value in the addition of utilizing more transactions because they've sort of paid for it a little bit in that annual license already.
[00:26:46] Speaker C: You know, something as eloquent as you made that sound, that's really freaking hard, like, just to pull off that blend in that balance, right. There's a lot in that discovery chain that you have to really piece together that control versus the cost. And like, how do you balance those things out? They want a little bit of both, right. But the context matters. And I think one of the things I always say about pricing and complexity is, look, the more times you have to explain your pricing with ands or buts or ifs, it's probably getting too complicated. Right? And so yeah, the moving parts can really cause friction and issues. However, there is such thing. And I get people throwing tomatoes at me all the time when I say this. But there is such thing as good complexity. Because to me, if you use the right amount of complexity in your model without getting confusing, then you've striked that balance here. And I think that whole storyline, you just gave kind of talks through the stepping and discovering the flat with, with some of the variability and trying to get the right flat and the right variability in even adjusting, maybe giving audiences exactly what they need, no less, and kind of doing those things. All that takes real work and understanding your customers. Going back to my pain. Attention comment. But listen, I got to understand this, right? How do you know, or at least how did you and the team get some conviction that like, yeah, we're actually making some headway here or we're finding the right balance?
[00:28:11] Speaker A: Yeah, look, it's not for the faint of heart. That's for damn sure it is not. And we knew that going into this and we created a team cross functionally, product sales, marketing, cs. And we really sat down as we went through the exercise of really making this big transition to the model that we're in today. And we said, all right, how are we going to know if it's working? Like, what are we going to do? And it really started with sales. And so sales said, look, we got enough to be dangerous. Like, let's just go out and try to sell this new model into some folks. And our sales team really leaned in because their job was to simplify the complexity in the pitch. Like, we knew that the mechanics of the model, yes, were complex, but if they were delivered in a simple way, it might really resonate. And I think our sales team did a great job of, you know, we always say, like, the curse of knowledge, you don't. The people that understand the mechanics of every decision we made. That is not what the customer needs to know. What the customer needs to know is, hey, we understand you. We understand the problems you face. We understand why you want to use certified. Here is the pricing and packaging that fits your business and what we believe is going to be best for you. Then let them sort of react. Let them ask questions, but don't go down this rabbit hole of like, well, you're going to get 50 of these transactions, and you're going to get 50 of these transactions, and here's how it's going to mix and match. Like, so we did a lot of training, a lot of coaching, a lot of rehearsing of, like, how that was going to go. And then we kind of put them out in the wild and they started having those conversations, and then we would watch them and listen to them and see, okay, where was the point of pause? Where was the point of, like, head scratching? How can we figure out how to sell this better? And we really focused on, we believed so much in the analysis that we had the right model that we said, let's try not to change the model. Let's keep changing the talk track until we're certain that it's not the talk track and we need to go back to the model. And, you know, we did make some tweaks, some changes to the model as we started to identify in those talk tracks where there was consistent, you know, hiccups. So there was things. And some of it was like, people really liked this opportunity to buy up our insurance or buy down the insurance, but we were trying to figure out how much should it cost? They're moving through this model a lot. Like, is there enough friction there? Is there not enough friction there? And how do we go back and forth in terms of what that price point should be. But again, we had so much conviction that this was the right model for the business that we put a lot on sales to continue to work the talk tracks. And they did an amazing job. And one of the things that we said was, let's try to undersell it for the first little bit because we didn't want to get over our skis, oversell, feel like people got bought into a package that they didn't need. And I think that kind of alignment across the business that said, let's undersell this thing. So we gain confidence, because the last thing we want are people saying, oh, I got sold the bigger package and I didn't need it. We'd way rather six months down the road have people say, hey, I wish I was in the bigger package. And we also strategically updated all of our compensation models for the sales team so that they felt like if that secondary sale came later on, they're still going to get the benefit from it. And I think that people forget sometimes how important those mechanics are, where if you have a sales team that is incentivized by a real big initial sale and we're asking them, hey, the pricing model is going to change. Your ACV in that initial sale might come down a little bit, but like, that's what we want, but we'll make sure that you get made whole on the back end if it does come up. Now, they were in and they were on our team and they were willing to try it. And that was really key and something that our team really worked hard on because we didn't want there to be these other variables we hadn't considered that make it look like the pricing model was the wrong decision, when in fact it was just internal kind of pushback from, well, I don't want this to be the new model because it's going to hurt what my take home is at the end of the day. And so that was something that we really had to work on and really think through strategically. And once sales sort of started having success, that gained a lot of people confidence in, okay, we're on the right trajectory, we're making some of the right decisions, and now we meet twice a week. That same team is still every week refining, and we're figuring out where did we forget something, where can we change something? And we haven't even gotten to conversion to our current customers. We've sort of looked at, that is a January 1 thing. So for the next six months, we're still in this playground mode of, like, honing the messaging, honing the model, making it all work together and making sure that we're not missing anything before we really go to say, this is our model for both new and current customers from this point forward.
[00:33:11] Speaker C: Oh, man, I could just record that last little piece right there and send it out to thousands of SaaS folks on what this really takes. Listen, I boiled everything you just said down to the pitch, patience, and precision. If I just had to think about everything you just said, and people are like, well, Marcos, the pricing, if it's simple enough, it should just take care of itself. No, no, this shit really matters. And the reason why is because of the framing of it. If you're leaking your complexity out into the sales pitch, if you're trying to grab too much and overselling, if you're not paying attention and tweaking and adjusting over time, it's not going to work. And so, you know, from my perspective, and I fully reject this idea, right. About pricing has to be one thing, has to be super, ultra simple. And I think what that really, people get a little bit tripped up on is you just have to make it, you know, easy for people to make decisions at the end of the day. And don't make it freaking hard for me to buy you. Okay, let's make those decisions easy. And that could come through in a lot of different ways again, in the pitch, in the tuning, and all that you did. So I think what you said is, like, vastly important for a lot of folks out there who might be on this train of simple, simple, simple. I'm like, yeah, but it's got to be the right amount of simple, the right amount of complex, because in the end, the more problems you solve for more people, you have to be able to make that balance like you guys.
[00:34:34] Speaker A: And that's a key point of it, too. Like, when we really thought about this, I think all the previous models, we were only focused on what was right in front of us. And when we finally got to this model, we said, this model can support the next product or the product after that, and it's not necessarily going to make it more simple. Like, it will continue to get more complex. There will be almost like a rate cardinal component of our model, but at least it has the architecture and the infrastructure to support that. And we're not going to have to go all the way back to the drawing board to say, okay, wait, now that we got a new product, how do we do this all over again? Right? And I think that was really important for us, too, because we're at an inflection point of product development, that it's just happening at a much faster pace. And we can't have the pricing and packaging model have to be reinvented every time we release something new.
[00:35:21] Speaker C: Look at you guys now. I bet you two years ago you look very different and in about two years from now you look different again. I think that's another big one. Price forward. Think about tomorrow and manage that way with what's coming ahead. Listen, that was amazing amount of good knowledge for folks. Last question on this one is what's next for you guys? And now we just touched on it a second ago, but what do you think you're going to do going forward now that you keep on building and, and expanding?
[00:35:48] Speaker A: Yeah. So I mean, in the go forward, I think as much as I say the model is prepared now for new products. Like we'll have to test that right when we go to add the next new product to it. How does it fit in? How do we tweak that sort of sales pitch? How do we think about, you know, making sure that it still stays as simple as possible for our customer base? So I think on the new business side, again, like, we feel good about the architecture and it's just going to be about testing it. I feel like also something really good that we've done is that team, that team that's getting together and not afraid to say, man, that call felt hard.
Can we look at this from a bunch of different angles? Let's get opinions. Let's listen to this. Why did this customer have pushback on this and we haven't been afraid to do that and hold each other accountable? That we're crazy if we think what we released the first time is right. We know it's an iterative process. I'm proud of, like the new business side, I think the next big challenge on this pricing model is conversion of current customers. Right. You're always going to have folks that end up getting charged more. You're going to have folks that are winners effectively in the new model. And we are starting to plan out that transition. And you go after the winners first and the folks that are going to have a nice, smooth transition, so to speak, and then really start to strategically think about introducing the new model to some folks that are going to recognize that it is going to be more expensive than where they currently are. We'll take a few of those in like Q four just to sort of prime the pump and know what we're up against. And then we're going to need to educate and train our team and get them prepared. And so really thinking about not only simplifying it for our customers, but then how do we simplify that for our team so that the pricing and packaging conversation can scale is going to be kind of what we need to do in the back half of this year because we really want to make January 1 like that cutoff line where everything from that point forward, every renewal at least, is a conversation of conversion. So that by 2026, sort of that business debt of having different people on different models has been totally cleared out. And we can really focus on scaling through new products and new initiatives that layer in really nicely to this pricing and packaging model.
[00:38:04] Speaker C: I'm smiling ear to ear right now because that is such a good methodical sequence. Right. How to think about this when people try to get to scale, you know, start with the lighter lift, start with the lighter lift and just keep on iterating forward and planning and preparing for all that. And that's just the way you laid it out there. Thinking about how some of the most successful pricing changes out there have come to fruition. That's usually the path and how they do it. So is it going to be easy? Probably not. You're still going to have learnings and things you're going to keep on doing. But the system and the method that you put in place, man, that is class a, high five, you know, grade a beef, whatever you want to call it. It's a really good way to go, man.
[00:38:44] Speaker A: So we know it's going to be, we call it hand to hand combat. We know that some of those are going to be hand to hand combat, right. And like, what the model says is not 100% what we're going to do. There's going to be some discounting in there, there's going to be some decisions in there, and we're going to prepare and arm our team for how to navigate that sort of decision tree. And if we run into a bump, well, I off road here, off rail here, right. And so, yeah, we're not afraid of it. I think that's the thing is like being able to tackle it head on and be responsive as you need to be to things that challenge your thinking and make you want to change. But having an endgame in sight and everyone seeing the value and benefit of that endgame is what I think is super energizing for our team.
[00:39:24] Speaker C: That is, that is. You are pricing with confidence, my friend. That that's what everybody, this is what it looks like to price for confidence. Tyler, thank you so much for opening up and giving us all of kind of the nitty gritty on how you guys figure this out. Your space is a pretty challenging one to figure out pricing and packaging and all that stuff. So I want to thank you for coming in, dropping these knowledge bombs for the SaaS community. I do have one last question to throw your way, man, and this is just for us to get to know Tyler a little bit better. Give me your favorite jam, whatever it is, song or artist growing up, what's the one song you could listen to over and over again?
[00:39:59] Speaker A: I mean, honestly, like, when you first asked that, I just, I think about, like, I was a Michael Jackson early kid, you know, like back in the day, it was MJ beats, man. Just that was.
Might not have aged as well to a younger audience these days, but when I was a kid, man, MJ was all time.
[00:40:18] Speaker C: No, my kids listen to MJ right now. Right. So it's timeless. It's timeless. I mean, is it, is it beat? It is a smooth criminal. Tell me what it is.
[00:40:25] Speaker A: Mandev beat. It was definitely the highlight.
[00:40:29] Speaker C: Classic, classic video, too. The whole nine.
[00:40:32] Speaker A: Oh, yeah.
[00:40:32] Speaker C: Listen, man, that is good. That is timeless. And you can never go wrong with MJ. So again, man, I appreciate you coming in here and would love to know maybe sometime in the future you come back, give us an update. You willing to do that?
[00:40:46] Speaker A: Yeah, man. Would love to. Appreciate you having me on. And it's a journey, so. So we'll see how we're feeling a year from now, but I would love to come back and check in and let you know how it's going.
[00:40:56] Speaker C: Cool. High five on all that, man. Excellent. And team, that was Tyler Adams from certified. He dropped some excellent knowledge points for you today. I think you should take it. Don't waste it. Go out there, get 1% better, keep moving forward, and remember to stop guessing and start growing. Until next time, thank you and much.
[00:41:17] Speaker B: Love for listening to the street pricing podcast with Marcos Rivera. We hope you enjoyed this episode. Forget to like and subscribe. If you want to learn more about capturing value, pick up a copy of street pricing on Amazon. Until next time.
