Episode Transcript
[00:00:00] Speaker A: Yo, mic 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 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.
[00:00:24] Speaker B: What's up? And welcome to another episode of the Street Pricing podcast. I'm Marcos Rivera, author, founder and pricing coach and today's guest. I'm super excited about. We're going to have an incredible show today. I have coming with us is Alyssa Higgins from Cypher Health. She's currently vice president of operations and enablement, and I would love to welcome you to the show.
[00:00:48] Speaker C: Thank you so much for having me. So excited. Always a treat when we get to talk together. I have a feeling I'm going to come away learning more than I could even share, so I'm pretty excited as well.
[00:00:57] Speaker B: Oh, you know what? People don't know what you've actually done and they're going to get super jazzed once you start talking about it. Okay? So real quick, give us the short on who you are and what you do.
[00:01:08] Speaker C: Yeah. Oh, man, is there ever a short? So, Alyssa Higgins, as you were so kind enough to introduce, but I've had the luxury of working at Cypher Health for almost a decade. And so what I do within the company is really try to support us from a growth, operations and enablement standpoint. And through my role, I've had the privilege of working on a number of strategic projects, including ones like pricing. And for those of you who have not heard of Cypher Health, we are a healthcare technology company and we partner with some of the largest health systems in the country to help them communicate effectively with patients before, during and after their care. So it's a lot of fun. And we focus mostly on enterprise selling. So very critical to have the right components in place to make that successful.
[00:01:50] Speaker B: Oh, yeah. And super tricky environment in healthcare. In enterprise, not an easy place to sell, but if you're thinking patient engagement, if you're in the know, then you know Cypher Health. And so what I want to do today is let's step into some of these special projects together. Right? So here's a quick roadmap for everybody. So first, this is a show designed by the bookstreet pricing, right? So we're going to go the same format, rewind. Let's go back into the past. Let's talk about a big pricing change or story that we could all learn from and really unpack it. Like, what did you actually do? How'd you figure stuff out? Then we'll bring it back to today under play. And so we'll talk a little bit about what's working now, what's really yielding a lot of benefit, and making it easier to capture value, and then we'll look into the future, fast forward, we'll look and see. Okay, well, what's next? What are you thinking of changing? Making some adjustments to better capture value. How does that sound?
[00:02:40] Speaker C: Sounds amazing. Can't wait.
[00:02:42] Speaker B: Terrific. Well, then let's jump right in. Let's start with rewind. Tell us a really juicy pricing story.
[00:02:48] Speaker C: So when we rewind, like I said, been at the company for about a decade, and overall, our pricing was, I would say, maybe haphazard for a good chunk of time. And I think for many, many companies who went through the COVID pandemic, that was really when we had to stop, take stock of what are we offering, how are we offering it to customers and how can we make it more flexible for our customers. So when I think back on pricing pre Covid, it was a lot of us centric, right? Or just thinking through what are our needs as a business? And what the pandemic, especially in healthcare, made us do is take stock and say, how can we be more flexible for our customers? And that was when we recognized that we really didn't have as consistent of a process as we would like. And it was fairly cumbersome, which in healthcare in particular, cumbersome just means slow, bureaucratic, not fun for anyone. And so when we were thinking through the pandemic, how we support them, how can we be more flexible to allow for them to help their patients as effectively as possible?
[00:03:53] Speaker B: Cumbersome and slow in healthcare. Are you kidding me? Those things actually go together.
Awesome. Yeah. So that's one of the big things that I notice, is that the US centric versus customer centric thing, right? So if I talk to someone about pricing, they'll say, gee, well, for my margins, for my cost, for what I'm trying to do, it's very focus inward and not really thinking through on the customer. I think there's always a balance to have a little bit of both in there, but really you should be led by what that customer really wants, what's driving them to buy and buy more. And that's really going to get you to the promised land. Good stuff so far. Let's keep going.
[00:04:26] Speaker C: Looking back on where we were and where we needed to go, we needed help that's for sure. So being able to look at things first and foremost to say where does pricing even fit within the organization? And like I said, we were pretty us centric. And so that also led to a lot of times being sales driven. And so within the sales function, which can be very effective, but at the same time didn't consider things like, what are our customers saying? Where do we want them to grow with us? Where are we leading them within our own vision. And so that was the other piece that I've been thinking about when we look back is our pricing didn't align with who we were as a company and who we wanted to be and where we could be if we could really unlock and unleash that potential. And again, move from being us centric to customer centric, how do we move from being slow and cumbersome to fast, adaptable and flexible?
[00:05:20] Speaker B: Phenomenal. Phenomenal. Most companies are probably thinking the exact same thing that you were at that time, is how do I move to a more flexible model that represents us and that shares the right value with the customers and gives them the experience that we know we can give. Right. And only us. I'd love to keep going and unpack. How did you actually figure out that, you know what, this just isn't fitting right. And I know that some people look at, well, gee, we're losing deals or we're losing something else, but is there something that magically said, aha, you know what? Not working.
[00:05:51] Speaker C: It was really taking us more than two weeks to price a deal. That was the biggest pain point. Right? So if you can't get someone pricing quickly, that I think diminishes the trust that someone might have. And again, we're working with large enterprise health systems, and when you have those customers, you want to instill trust. You want to really identify how can we move quickly together? Because time is precious. Those moments really matter. And so if we don't have a model that we can go back to and say we know that this is going to meet both of our needs, it helps us service you because you need to price at a point where you can actually service your customers. But on the flip side, ones that would allow customers to quickly take something into consideration and move forward. So that was the biggest impetus, was just how long it was taking our sales team to get back to customers with answers on pricing. So even without looking at the model, it was the process that was a big driver of where we tried deal desks and other things that SaaS companies put in place. But it was still taking us a lot of time to get the right answer. So that was the impetus for where we knew, okay, this isn't working. We need to try something else.
[00:07:00] Speaker B: Imagine that someone saying, yeah, I'm interested in buying something from you. Great, just give me two weeks. I'll come back with you with a price that we can then talk about. That is something that I think is a glaring signal. Right. I think that's what you saw internally, that, hey, we got to change something here to make the pricing a little bit easier to pull together. That amount of time can really hurt your chances. I always say time will kill any deal, any deal out there. So the best you can do to bring that in, important. So let's keep going. So now that you've discovered, wow, crap, this is not the right model, where do you go from there?
[00:07:35] Speaker C: Yeah. And so we looked at things like, why is the process taking so long? Right. So you go back and you say, well, we have a price book, we have a way of pricing, but we're a very flexible technology. There's so many options for what we can offer to a customer based off of their needs, how they're integrated, what their workflows are, the patients that we're going to be connecting with, their goals as a system. And so when you take all of those pieces into consideration, how can we help simplify something so that we know it's going to meet the majority of our customers and then add in flavors of flexibility in the pricing so that we can get things to them faster, information to them faster, so they can make decisions faster. So that was the first step in saying, okay, why is it a challenge for us? And it's because we can offer so many different types of packages or so many different types of features, functionality. So once we understood, okay, here's where we know we want the process to go, it was also then, well, who needs to decide how this is going to operate, how this is going to work? Like I had mentioned, we were a bit more sales led in terms of our pricing. So how could we infuse more of our product team, our product vision, understanding from our customer success teams, our marketing teams, doing some more competitive intel. So needing to even take a step back and say, just overall, now that we know why the process is cumbersome, what do we need to make it less cumbersome?
[00:09:05] Speaker B: Yes. And that was the thing that I think most folks begin to realize, that, wait a minute, this is a team sport. This isn't just a solo act. And pricing across different groups is actually the best way to round out their perspective. Right. Your customer success, sales, product will come in with very different points of view, and you have to sort of align those, which is not easy, but you align those points of view together to try to drive the best possible model that you can. Now, you said something a second ago that really popped in my brain. You said flavors of flexibility. Right. And I love the way you put that because flavors of flexibility, some applications out there, they've been around for a while, too, have built so much functionality, so many options and configurations that you can do almost anything. And when you can do so much, it gets really harder to nail down the value. And so flavors of flexibility, I want to hear a little bit more about how did you draw the lines between those flavors, because not every customer is the same. And I want to know how you figured all that out.
[00:10:08] Speaker C: It's the same way that we brought some of those different viewpoints together. It was really talking to our customers and getting their input and hearing from them what it is that they like, what it is that they find important. And even within all of those flavors of flexibility and different bells and whistles that we offer, able to extrapolate what are the core tenants according to them, how they want to buy. I think what's really exciting about pricing today is that there's so many great models out there, good, better, best. There's usage based, there's user based, and when you start to peel it back, there's options for customers as well. But is there something that unifies them and what they see in terms of how they want to be priced? And also then what are the flavors that matter most to them in terms of what they want to package and see come to fruition. So I think oftentimes when you do that and you get enough customers to participate in that type of discovery, you're going to get a very well rounded answer. That's going to be hard for any team to disagree with because you really talk to your customers or your prospects to get their understanding.
[00:11:11] Speaker B: Yes. Underscore bold, talk to your customers. Right. That's usually one of the first places to go when folks are really trying to understand where do I go with pricing? You got to have the conversation, right? And I think extracting out what they really care about, what they don't care about, and just understanding. You said a second how they want to be priced or what's fair in their mind in terms of how things change and scales with value is key. And sometimes it's not two conversations, but it doesn't have to be 200 conversations, right? It could be a couple of dozen even, just to give you a sense for what's going on directionally. Right. So I love getting those flavors from just straight up, straight from the horse's mouth, right. And talking to customers and pulling that out. So now that you got this alignment, you got the process, the flavors, you realize that. How do we keep the complexity away from our customer? Because it can get complex quickly. Then what happened? How did you mobilize this thing?
[00:12:05] Speaker C: So what we did is we brought together all of the key stakeholders within the business of what is it that we want to see change. I was lucky enough to help lead the project. I was lucky enough to partner with you and your team on that as well, because, as I mentioned, we needed help. We didn't have internal pricing expertise to say, this is what others are doing in the industry, or this is how you can reframe the way that you think about pricing to lead to more consistent growth and also more customer satisfaction with what you're offering. So after hearing directly from our customers what it is that they like going back and saying, all right, let's lay out everything that we offer. Let's take a look at all those beautiful flavors that we have. Now. I can't stop saying flavors, so look at all those beautiful flavors. Let's see what recipes we can create. And it's funny using the word recipe, too, because that's also how we started thinking about our product as well, is that we offer a bunch of ingredients that a health system can take and say, well, I want a dash of this and a spoonful of that, and we're going to use that to make XYZ happen, which is so fun and exciting. And so when we started to look at what our customers wanted, what is it that we offer? But then what is our vision? And I mentioned that a little bit before. And so at cipher Health, what we're trying to do is create a single pane of glass between patients and providers that enhances every interaction. And how do you do that? It's by communicating. It's by asking patients proactively about how they feel or reminding them of a visit and helping to coordinate and orchestrate their care, and doing that in a way that feels seamless. It's how so many other industries work, and healthcare, because it's so complex, it's challenging. So knowing where we want it to go is that next very important piece. We want it to be so easy for a customer to grow with us. So what is it that we need to incentivize for that growth? So that they see value now, but will also see value later. So moving our model away from point solution purchases, so one program costs x, adding another program costs y, you can maybe discount up to x percent with two programs, something like that to, hey, we're going to actually let you choose which programs you want and we're going to make this something that is more flexible for the needs of your community at that given time. So changing it from a program based model to a usage based model, and I know there's a lot of complexity in what I just said, so I can certainly unpack that a bit more.
[00:14:35] Speaker B: Yes, we're going to take it a little bit. I'm going to double click on a couple of things. That was amazing. I do want to say, though, that moving from a point solution to something that's more holistic, a platform, you said single pane of glass, you want to unify, and oftentimes folks want that too. Other SaaS leaders want to create something that is a one stop, a hub, the place that you go, the single source of truth, they like to say. But then their pricing model is so fragmented, so custom, so confusing, and it just does not jive with that message. Right. And so you knew where you wanted to go. This is what we want. This is who we are, who we want to serve. And then now we need to sort of deploy a pricing model that supports that. So important to get that vision right. Otherwise you're throwing darts in the dark. You don't really know what the target looks like and what good looks like until maybe it's too late. You never get there. Right. So I think the idea behind it is, okay, now you decided, let's get away from point. Let's start getting into something that's more flexible, that's more usage based. Now, this is where it gets juicy. I want to know, how did you figure that out? Tell me about the usage based model.
[00:15:41] Speaker C: So with that, it came down to, again, what were our customers saying? How they wanted to be priced at, what is it that they wanted within their pricing? And it came back to they want flexibility. They don't want to have to come back and ask us, can I do this? Can I do that? So once we understood that they wanted that flexibility, it allowed us to say, how do we support that? And so moving from, okay, we had complex pricing spreadsheets that you had to enter in how many interactions over how many patients, over how many programs. And I'm telling you. This spreadsheet could make anyone's head spin. Taking that and converting it into, okay, what is the lowest price we can offer for this usage? And then what is it that we need to support that? So the level of integrations that might stay very similar across most of our customer base, or the number of programs that we can support within a given time frame, so that we could say, okay, if you purchase our bare minimum package, we can actually offer you up to three programs that you can choose how those are used, whichever way you want to go about it, and then adding in a usage based component so that they could always turn the dial up or turn the dial down, just given where they wanted to go or what they needed at a given time. So taking that. In practice, pre Covid customers didn't even know what types of outreach they might need for their patients, whether at the time it was screening in case they had been exposed to Covid, that was very important early on. So screening their patients that was new, or later on, it was making sure that patients knew how to get vaccines or how to find information or also monitor patients that had Covid as well. So that was a huge area of flexibility that they needed. So then how could we actually adapt our pricing model to meet that level of flexibility?
[00:17:33] Speaker B: That is huge, because you're talking about variability, right? And variability requires flexibility. You got to be able to move around. And it's something that I wanted to underscore, too, that the customers didn't even know where things were going to change and how much they were going to need. So how do you sell and package something to someone who doesn't even know where they might be and where it may change and so on and so forth. It creates a lot of friction in the sales process. So you remove the friction by offering a package almost like the value. Mendel. Here's a menu. Pick three, right? And then you allow them to pick the three that are most important to them. And then, of course, over time, that could change. And then you get some of the usage. You say, here's how much usage you get. If you need more, great, we'll get you more. And that sort of sets the stage a little bit and helps. Now, I got to ask you a question, though, because that is a model that takes a lot of the friction out, but it also requires a bit of good internal definition and alignment to what these things are and what it takes to deploy them on your side, right? So it's not the kind you just click a button and all of a sudden, everything just happens, right? So tell us about how you mobilize this model of the pick three and the usage.
[00:18:46] Speaker C: My favorite new acronym for pc pricing committee. This is a group of people you got to bring together to help make those decisions and buy into the infrastructure changes that you might need. And I know infrastructure is a weird term for a SaaS company, but that's the way that you got to think about it, right? If you move to a subscription based model with a usage component, which is what we did, you have to understand, what are you offering within that subscription? Can we support that? How will we support that and measure that? And then how do we use the meter on that usage to make sure that we are proactively communicating to customers where they stand and that for us, has a product component. So having that committee bought into this is what we're doing, this is how we're going to do it. This is how we measure success. And then constantly coming back to that committee. We have our meeting next week, actually, and I'm very excited because where we go with this has to evolve. We've gotten some great feedback from our partners over the last year and a half since we've put this in place, and now we get to keep evolving it, keep on going and saying, okay, how do we make this even better so that they can have that flexibility even more? Because they're loving that. So how do we continue to evolve that so they can continue to grow faster?
[00:19:59] Speaker B: Yes. That's the key is when I see companies who do really well with pricing, they get that pricing committee meeting, right. They don't skip it. They don't treat it like just another drudgery meeting that's on their calendar. Nobody wants more meetings anyway. Right. But the idea, if you get that meeting right, you get the right inputs, the right alignment, the right outputs to keep moving and adjusting the model. And you said something super important, which is this is a recurring revenue kind of usage, but also SaaS model that is different than the old world. It's a different animal, different economics, and we need the whole business behind it in order for it to work. So I try to warn folks, you can't be a little bit SaaS or just dip your toe in there. If you're really trying to shift to that model, you got to bring all the resources that you can behind it. So, one last thing. I know that everything wasn't always smooth, right. There's always some bumps in the road in this journey. Talk about a bit of a snag you ran into and how did you overcome that snag?
[00:20:54] Speaker C: Oh, I think there's so many snags every single day. Right. And I think one of the biggest snags that we've run into is not keeping that pricing committee consistent. And I think that shows right in how much of the team is enabled to really use it and take advantage of it. And how do we, as we've added a ton of new technology in the last year, we need that committee to be in place to make sure that we're clearly articulating to our teams what something costs and how it's being priced. And so really going back to the fundamentals of a great pricing strategy and how you can go back to that committee and make sure that you're following the right steps. Did we talk to customers? Did we get the right information from the front end? If not, how do we fix it next time? So, through those snacks, we've really taken a harder look at how do we keep this consistent, as you mentioned, because if you don't, it's just not going to be successful in the long run. You might see a little success, and then it'll fizzle out.
[00:21:50] Speaker B: Yeah, a little bit. And it'll just kind of die out if you don't have it in place. So let's tell everybody who's on your committee by role. Who do you have in there, what representation we have.
[00:22:00] Speaker C: Our chief technology officer, our head of product, our head of sales, our chief growth officer, and our chief financial officer. And then we all get inputs and myself and we all get inputs from different areas of the business to bring to that committee, whether that's homework assignments of, hey, go talk to this person or go make sure that we've done the analysis on the cost of this new feature or something else there. So we all have homework. We might go talk to others in the business, but then that's the core group. It's about six of us that come together to make the final decisions.
[00:22:32] Speaker B: It's about six, not 16, not 26, not two. Around six. That's about right. That's that old Jeff Bezos one pizza or one team? One pizza rule, whatever it is. But it's a good amount there to keep driving forward. It's enough to get a good set of touch points around the business and making sure that you're able to make sound decisions to keep moving the model forward. Because it's new, you're going to keep changing it, evolving it. Like you said, I love it. So think about those roles. Do it one more time. You said sales growth. You said finance, operations. What was the other one?
[00:23:04] Speaker C: Product and tech.
[00:23:05] Speaker B: Product and tech. There you go. So at least think about those in your pricing communities when setting them up. So let's take us from the past now to today.
What's working for you right now? What do you think is something that you're like, yeah, I'm glad we're doing this.
[00:23:18] Speaker C: Glad we're getting back to the quarterly pricing committee meetings. That's very successful and really just keeping the communication open on what are we learning? What are we learning from our customers? What's going well, what's not. It's not always going to be in your salesforce data. It is going to be in the anecdotes you're hearing from your team. And how many requests are you getting for offshoot pricing or discounting or other things along those lines. So that's something that we're doing much better today than we were even a month ago, which is listening to the feedback and taking that into consideration so we can quickly pivot and make changes.
[00:23:51] Speaker B: I love it. Don't ignore the anecdotes. Right. Those are good data points, too. They may not be able to have full sample size and extrapolate and detect trends, but they're really good in context building, figuring out the why behind that. I love that. Now let's take a look forward. Let's take a look forward into the future. I know that there's mechanics you're working out and there's changes. You're evolving. So what are some things on the horizon that you feel like, yeah, those will be some worthwhile areas to change or tap into.
[00:24:19] Speaker C: I think it's continuing to evolve on the model that we've built. Right. It's through that same lens of rapid learning and taking in the data over periods of time to then say now, how do we maybe change up the packages or change up the way that we are adding in add ons or how do we incorporate AI now? Because that's been a big part of our roadmap. And how does that affect our pricing? So looking down into the future, I think it's going to be a very similar model to what we have, but a much more effective one, one that is getting closer and closer to that sweet spot of helping a customer start.
[00:24:52] Speaker B: Today, grow tomorrow, start today, grow tomorrow. That's the whole name of the game for the model there. You said AI. Everyone's trying to incorporate some level of AI. Have you guys figured it out yet? Are you still working on it?
[00:25:01] Speaker C: Oh, I mean, if anyone says they figured it out, you're just not using the tech well yet because there's so much to come. It's such an exciting point in time to not only work in SaaS, but to be creating a product that can really take in. I mean, we have a decade of patient data and what we can learn from that with AI tools. Machine learning is so powerful and just really excited to again continue on our mission to make it easier for that pane of glass to be as clear as possible.
[00:25:28] Speaker B: That's fantastic. I'm going back here because all the things you said today really hit home with a lot of SaaS founders, especially if they have a more complex solution and they serve mid market enterprise or just customers that are really tough to sell to in general. But getting that vision locked in, getting alignment across the group, knowing what you stand for, pulling that complexity out of the model, offering some flexibility, and really supporting that with what customers really want, and then getting that pricing committee meeting cadence and audience and all that subject matter, right. To keep on getting better. Right? And I love all those pieces. If people did exactly what you just said, they'll be way, way ahead of the game. So I got one last question for you, though. What's your favorite song? It could be anything. 90s hip hop gets a bonus, but what's your favorite song of all time?
[00:26:16] Speaker C: Well, my favorite 90s hip hop song, and I think it's a perfect theme for today, is mathematics by most def. Wanted to get me hype?
[00:26:24] Speaker B: No, you did. That's impressive. Most people don't quote on most def. Mathematics especially.
That's a real hip hopism right there with most deaf coming out there. I love that one. Wow.
[00:26:35] Speaker C: I was hoping I'd surprise you a bit.
[00:26:37] Speaker B: You did. You did. That is really good. But I do want to listen. Thank you for jumping in here and getting street with us, dropping some real key knowledge. I think everyone's going to take a lot away from this. And team, I want to thank you for joining us today. And remember, stop guessing and start growing. Until next time, thank you and much.
[00:26:57] Speaker A: Love for listening to the street pricing podcast with Marcos Rivera. We hope you enjoyed this episode and don't 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.
