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.
[00:00:23] Speaker B: Alright, what's up? And welcome to the Street Pricing podcast. I'm your host, Marcos Rivera, author, entrepreneur and pricing coach. And I'm Uber excited about today's guest. This is someone who I've seen just completely take pricing by the horns and master it and have lot of results to show. We're going to learn a ton today. Joining us is Arnab Mishra, chief operating officer of exactly. And just a phenomenal executive and smart SaaS growth architect. I could say so many good things about Arnab. Arnab, welcome to the show.
[00:00:58] Speaker C: Well, thanks for having me, Marcos. I'm really excited to be here today and to talk about all things pricing.
[00:01:04] Speaker D: Oh, we're going to get into all.
[00:01:05] Speaker B: Things pricing together, man. I want to first start off with just a quick tell everyone a little bit about yourself, your role, what you do at exactly and also what exactly does as well.
[00:01:15] Speaker C: Yeah, so I'm the chief operating officer at exactly. So I'm responsible for a variety of parts of the business, from R D to customer success, port services, technical account management. So kind of a broad set of activities. Exactly. Is an enterprise software company. We deliver cloud based software SaaS applications focused on helping sales teams be more effective and efficient. So we typically address the needs of the CRO and the needs of the CFO when it comes to things like how do I plan for my sales team, how do I set up a territory, how do I define a quota, how do I set up incentive compensation management plans and administer and manage those plans and get results from those incentives? And then how do I, on a day to day basis, make sure the sales team is focusing on the right stuff and managing their pipelines and forecasting their business accurately. So broad set of applications, but we feel fortunate to have many customers, some of the biggest names across industries be our customers.
[00:02:14] Speaker B: Fantastic broad point of view. You can see a lot of different functions working and sort of where there's areas that pricing could impact them. I think that's one of the reasons why I think when it comes to implementing new pricing or changing something, you're so thoughtful because you can see kind of what that impact could be across the base. And so I am eager to start digging into some of your big pricing success stories, maybe even where you struggled. Let's just open things up and talk honestly and get street about what happened with pricing at exactly just for everybody, I had a front row seat to see some of the early successes and things you've done there. So I really think a lot of folks out there could learn from your aha moments and things that you discovered along the way. So we're going to unpack that and here's what we're going to do. We're just going to do it very simple. Let's go rewind back in time to where you really picked up pricing and you implemented it. Let's talk about all the things that you did along the way, some things that didn't work out, some things that did want to get as honest and real as possible, and then we'll bring it back to today. So what's working really well in today's model and pricing and packaging? What are some of the things you're really proud of? And then we go fast forward. Now, what's coming next, what maybe changes you have coming down the pike, you're thinking about updating and for what reasons, and then we can take it from there. So rewind. Let's take us back. Let's talk a little bit about a big pricing change. Please indulge us. I can't wait.
[00:03:41] Speaker C: Yeah, I think when I started exactly, the company was relatively immature from a pricing perspective.
They hadn't really spent the time and energy to really think strategically about pricing. The company had grown so fast, had had so much success, that it wasn't sort of the thing that was at the top of people's lists. And so the first thing I had to do was kind of make the case for pricing.
[00:04:03] Speaker D: Right.
[00:04:03] Speaker C: And so I remember initially, the first thing I started working on was organizational alignment of pricing. So when I joined, I think pricing was owned by sales operations, right. And so I think at a certain level, the company had almost conflated the process of quoting with the process of setting pricing policy. And so I had come from a background, as you know, where I held pricing sort of responsibilities. So the first thing I did was have to make the case and say, well, we need to be more thoughtful about pricing.
[00:04:32] Speaker D: Why don't we pull it out of.
[00:04:33] Speaker C: Sales operations and move it into the products organization, which is kind of where I was spending a lot of my time at the time.
[00:04:39] Speaker D: So we did that.
[00:04:42] Speaker C: Part of my sort of commitment to the company was that we're going to do pricing, right. And it's going to drive a lot of value. And I remember a great study that I saw that showed that a 1% improvement in pricing can deliver kind of twelve to 13% improvements in operating profits. And in contrast, if you improved customer retention by a percentage point or customer acquisition by a percentage point, you probably got like a fourth of that type of lift or a half of that kind of lift. So pricing is this lever that just has significant value.
[00:05:12] Speaker D: And that was the case that I made.
[00:05:14] Speaker B: Hey, but there was two interesting things, right? Because no one can really argue those numbers. I think that's the famous Harvard Business Review one that talked about the study they did on the net increase and impact of pricing, how a lot of it just falls to that bottom line, which is a great lever to pull. The churn one is, I think a lot of folks miss that. So I'm glad you brought that up. But when you asked the company, hey, let me take this out of sales ops, let's lead it in another or a different way.
[00:05:41] Speaker D: Did they push back?
[00:05:42] Speaker B: Like, did anybody just say, nah, it's.
[00:05:44] Speaker D: Good over here, we should keep it there?
[00:05:46] Speaker C: Yeah, I mean, I think, look, I think inertia is a strong force in any organization. So I think the initial feedback I was getting, because at the time, I was the new sort of head of products at the company, was, why do you want to spend your time on this? Right. There's a lot of other stuff for us to focus on. Why are you picking this thing as one of the first things you want to tackle?
[00:06:05] Speaker D: And I think part of the reason.
[00:06:08] Speaker C: Was when I first joined, I looked at a bunch of the data around the revenue per subscriber that we were getting, the discounting that we were seeing. And it was an all over the map kind of phenomenon. Right. There was like no rhyme or reason to some of the dynamics we were seeing, which just very quickly you could look at it and say, look, there's.
[00:06:25] Speaker D: A lot of inefficiency here.
[00:06:27] Speaker C: We are not sort of seeing the standard curves that you would see from a pricing perspective. I thought the packaging was a bit off, and I can talk a little bit about packaging too.
[00:06:36] Speaker D: And so that's sort of what led.
[00:06:38] Speaker C: Me to make the case. And I think I'm, as, you know, relatively passionate about this notion of monetizing software well. And so I think that probably came through and I got a little bit of a hall pass because it was kind of the first 90 days, and let's see what this new guy can do.
[00:06:50] Speaker D: And so that helped as well.
[00:06:53] Speaker B: Phenomenal. A little bit of a risk, right. Took a bit of convincing, but overall, the right move. Take us through. Now that you own it, you convinced them. Okay, now I can do something here, unpack that a little bit. How did that go? How did you decide what to do first, 2nd, third?
[00:07:07] Speaker D: Yeah.
[00:07:07] Speaker C: So the first thing, so we assigned a bit of a tiger team to the process. And one of the things that we've always tried to do while products owns.
[00:07:16] Speaker D: Pricing, it really is a cross functional responsibility. Right.
[00:07:19] Speaker C: And you need to bring in people from across the company to sort of rally around kind of what the right pricing is. And I'll talk about kind of how we did that. But the first thing that we did.
[00:07:29] Speaker D: Is we said, let's set out the.
[00:07:31] Speaker C: Principles and the reasons why we're doing this and what we're trying to achieve.
[00:07:36] Speaker D: And so there were sort of like.
[00:07:37] Speaker C: Three core principles and objectives that we tried to adhere to, and those are, frankly, are still steady today, a few years later.
[00:07:45] Speaker D: So one is the goal of pricing.
[00:07:49] Speaker C: Is to reduce the friction between the.
[00:07:52] Speaker D: Customer and our sellers, right?
[00:07:54] Speaker C: So we want to do things in pricing and packaging to reduce that friction, to make it easier for our sellers to sell and make it easier for our customers to buy. And so we should never lose sight.
[00:08:03] Speaker D: Of that sort of like job one.
[00:08:06] Speaker C: The second thing is to make sure that we are thoughtfully monetizing the features and products that we're delivering.
[00:08:12] Speaker D: Right.
[00:08:13] Speaker C: And that really is a function of understanding the value of what we're delivering, understanding the ROI business case for why someone would adopt our stuff, and then saying, out of all of those incremental economics we're generating, what portion of that should we be keeping as the provider of the technology?
[00:08:30] Speaker D: And then the third principle was recognizing.
[00:08:33] Speaker C: That pricing is not a one and done activity, it is a continuous activity. So as we were building the program, the thing that I kept asking the team to focus on is, okay, what are we doing to make this a continuous process? And that touches a bunch of different areas from how you're capturing data about your pricing, competitive win loss data and more qualitative data, how you're engaging with the rest of the organization, because the.
[00:08:57] Speaker D: Reality is, once you dig into it.
[00:08:59] Speaker C: Everybody in the, especially everyone who is customer facing, they all touch pricing. Everyone knows your prices, they know what customers are paying. And so there's just like a ton of, I think, support that you can generate if you can harness that collective wisdom. And I think a lot of times people approach pricing as this locked in a room, ivory tower exercise that's sort of like separated from the rest of the operational motion of the company.
[00:09:24] Speaker D: And that's absolutely not true.
[00:09:26] Speaker C: Pricing is core to the operational function of the motion of the company.
[00:09:30] Speaker B: I got to give you a major high five for this one, right? Because a lot of companies out there, you're right, they see it as a one and done activity. They'll maybe run some spreadsheets in a corner, and that's really not going to get you the outcome you want. And when you set those three pillars in the very beginning, those three principles, and really thinking about reducing friction is when I see fantastic pricing models out there. Those are the ones that have the lowest selling and buying friction. People enjoy the product they buy, and then they buy more later as they gain more value, and the company partakes in that. And so setting that very clear up front, why are we doing this? What are we going to get out of it? And then making sure that the expectation here is that this is a competency, a muscle we're going to continue to do over and over again, I think is a fantastic way. And a lot of companies can really benefit from that stage setting up front. So that way it kind of drives a lot of what comes next, which is we're about to talk about, which is, okay, how do you solve this stuff? How do you figure it out? But love that man. So keep going. Take us now that everybody's all lined.
[00:10:31] Speaker D: Up and set, what happened?
[00:10:33] Speaker C: Yeah, so once we had defined the principles, we kind of got to work. I mean, there's a lot of obviously blocking and tackling that has to happen. So the way we think about it is almost in sort of a lifecycle view of the process. So the first phase is really building what you call the fact base. So all of the data that you have about your pricing. So this data that tends to be at people's fingertips are things like win loss data, historical data about what prices we're achieving, segmenting that data by segment of the market or by vertical or by use case, you tend to have.
[00:11:05] Speaker D: Those at your fingertips.
[00:11:06] Speaker C: We augmented that data with an internal survey of the people who touch pricing, which was like, it was a good sort of, probably 20, 30% of the company had intimate sort of opinions about pricing. And so we did a survey, we captured a lot of data that way. We did a bunch of internal interviews. And so the idea here was contextualize the quantitative data that we had in the win loss and the historical pricing stuff that we had with more qualitative.
[00:11:35] Speaker D: Like, here's kind of what's happening when.
[00:11:37] Speaker C: We talk to customers. Here's the feedback that we get when we've won a deal, generally. Here's where we end up when we lost a deal. Here's kind of what the feedback we got. And so that helps contextualize a lot of that information.
Once we had all that data at our fingertips, that's when we could go in and do a bunch of data.
[00:11:54] Speaker D: Analysis with that fully contextualized data.
[00:11:57] Speaker C: So everything from discounting and price unit analysis to we looked at how are we doing in pricing visa vis specific products that we have. How are we doing in pricing visa vis certain competitors that we have or use cases that we're selling into? And then we spent a bunch of.
[00:12:13] Speaker D: Time, I think, also thinking about how.
[00:12:17] Speaker C: We articulate the value of what we do. And so there's a whole ROI process that we went through in parallel to help sort of our reps sell the value. So that's the data analysis piece.
[00:12:27] Speaker B: I can see a lot of SaaS companies rolling their eyes right now because they don't have good win loss data, even good opportunity data. They're probably missing a bunch of stuff in their CRM they're not even capturing, and all this great information is sort of slipping through their fingertips. Right. And then if it's talking to those folks internally, they're thinking, well, why would I talk to my own internal folks? They're all biased, right? They just want to sell more or whatever, raise the price. But you said something that I thought was really a key point I don't want to miss out on is contextualizing the information and the data. Right. Data can say whatever the hell you want, but that context from the internal teams, and you said it yourself, folks who touch the product know the pricing, understand the value. That is a really big, I think, miss from a lot of companies today. You can craft a survey and some interviews on Monday and get some pretty decent contextual insights by Friday. It's something that I think is a huge miss, and I'm so happy you brought it up that that was your step one, because I think a lot.
[00:13:26] Speaker D: Of companies can learn from that. Yeah.
[00:13:29] Speaker C: And I think it's super helpful. And by the way, we're constantly surveying, we probably do multiple surveys a year on how the pricing is playing. So it's been going back to that third principle of making it continuous. That's not something you do just at the beginning. It's something that you can learn from over time.
Once we had done the analysis work, the next thing that we did is we did a bunch of working sessions where we brought together sort of a cross functional group of people to review the analysis, review the contextualized data, get more sort of feedback from them.
Initially, we had come up with kind of like a draft hypothesis of how we would want pricing to be and how we would rejigger some of the price points. So we got feedback based on that, that cross functional team, super powerful, super influential in our thinking, and very valuable to already get the buy in process going. Because one of the things that is always a challenge in pricing, especially when you're changing pricing, is that, again, human beings are just naturally wired to want things to be sort of on a linear path. And so if you're going to make a change, you're going to have to sell it internally. And there's nothing like selling it internally by not getting those people involved in the process itself. So they've got their fingerprints on it as well. And so by having that working session.
[00:14:46] Speaker D: Step, and it was a bunch of meetings, it made it a lot easier.
[00:14:50] Speaker C: To actually implement the pricing later because everyone was bought in, everyone understood the rationale. Everyone had sort of lived through the trade offs that we made and that.
[00:14:58] Speaker D: Made the rollout just that much easier.
[00:15:00] Speaker B: Yeah, I fully agree with all that. But I got to ask you, I.
[00:15:03] Speaker D: Got to ask you, how did you.
[00:15:05] Speaker B: Get them to jump on, just to jump in the train and go with you were there, folks are like, look, I'm busy enough. I don't want to get in on all this and get involved. How did you convince them to join the effort?
[00:15:17] Speaker C: Yeah, and it was a lot of, frankly, the same selling that we did to get pricing out of sales ops.
[00:15:22] Speaker D: Into product, which was, look, this is really important.
[00:15:25] Speaker C: Let me just break down for you the value we could generate for us.
[00:15:29] Speaker D: As a company if we do this right.
[00:15:32] Speaker C: And so there was a lot of that narrative, and then there was also.
[00:15:35] Speaker D: A narrative which was, and by the.
[00:15:37] Speaker C: Way, we can't do this without you. You're the ones talking to the customers. You're the ones who are out there in the trenches having these conversations day in, day out. Your perspective is absolutely necessary for us to do this.
[00:15:49] Speaker D: Well.
[00:15:50] Speaker C: And so I think all of those.
[00:15:51] Speaker D: Things, I think people, one, obviously wanting.
[00:15:55] Speaker C: To create value for the company, and then two, knowing that they're not there to rubber stamp it, they're there as.
[00:16:00] Speaker D: An equal thought partner to us, to.
[00:16:03] Speaker C: The people doing the work, rather. And that their feedback is going to be incorporated, I think, gets people involved pretty quickly.
[00:16:10] Speaker B: Phenomenal. So here you are. You got the green light, you got alignment, you're grounded, you got some data.
[00:16:16] Speaker D: What did you do? Let's get into that.
[00:16:19] Speaker C: Yeah, so we did have to go through sort of like a whole buy in process with the board too, and all that kind of stuff.
We did all of that in terms of kind of what we actually did, I think a few things.
[00:16:30] Speaker D: So one is we identified the optimal.
[00:16:33] Speaker C: Price for our products. So we identified kind of that price curve for our products. We looked at sort of, we did a bunch of great analysis around pricing and discounting as customers got larger for different products. And so a lot of, I think, thoughtful exercises went in to figure out.
[00:16:50] Speaker D: What the price points should be.
[00:16:52] Speaker C: The second thing that we did is we repackaged our products. So we had historically been selling our products in kind of this monolithic way where it's like, hey, here are all.
[00:17:01] Speaker D: The features at this price point. And I think while that's simple, the challenge that you have there is every.
[00:17:10] Speaker C: Customer then looks at your product and said, well, of these hundred ish features.
[00:17:14] Speaker D: Or 200 features, what are the ones.
[00:17:16] Speaker C: That I care about?
[00:17:17] Speaker D: And then what am I willing to pay for those things that I care about, right?
[00:17:21] Speaker C: And so what that inevitably does is it means that every single customer conversation is this bespoke negotiation of the customer trying to pay what they think is fair value to the features that they're.
[00:17:32] Speaker D: Going to use and the seller trying.
[00:17:35] Speaker C: To figure out what it is that they can get out of the customer. And that's highly inefficient. And then there's also the subsequent problem of customers needs aren't static. And so they might need ten features today, but next week they might need 15, a year later they might need 50. And so by selling them the monolithic thing at the beginning, you don't have an ability to monetize increasing feature needs over time, right? Which is a lifeblood of sort of growth for SaaS business.
[00:18:00] Speaker B: I want to say amen to that, man. Amen. Because you just got street with it for a second here, right? The one size fits none approach that. A lot of companies out there, right? As a customer, I care about what I care about and my needs may change over time or will change over time. And those are two key reasons why always thinking about am I packaging the right way, allowing where I can give the right set of features to the right audience, is a big unlock for pricing and packaging. I know you're going to step through this, but I see a lot of these. One package or just one and done, because, hey, it's easy, but it really does limit your ability to capture value.
[00:18:36] Speaker D: Yeah, thanks for bringing that one.
[00:18:37] Speaker C: Totally. Absolutely.
We've gone to basically a good, better.
[00:18:41] Speaker D: Best type packaging approach.
[00:18:43] Speaker C: I think one of the reasons why companies don't do that is it's not easy to figure that out. I mean, it's a combination of art and science. What I found is the key thing that you have to figure out is your user archetypes. Like, you have to really understand what are the types of customers you're dealing with and what do those customers want. And so we went in and did a bunch of research and talked to a bunch of customers about what are they using our software for? What are the key features that are driving value for them. And that allowed us to group together three to five kind of archetypes that we thought were interesting, and then that allowed us to create bundles of features that address those archetypes. And by the way, that thinking is super helpful for reps, because then when you're selling, you can guide the rep to sort of say, hey, which archetype are you talking to? Are they someone that's just trying to do these subset of things? Are you talking to someone that's really trying to use this as a core function across functions? Are you looking for someone who's really trying to do something that's sort of more advanced and AI and data analytics focused? And once they figure it out, then.
[00:19:41] Speaker D: They can say, okay, let me focus.
[00:19:44] Speaker C: My efforts on one of these bundles. The other thing that it does is a structured construct in which to talk about value.
[00:19:52] Speaker D: Right.
[00:19:52] Speaker C: Because what you end up having in these conversations is the customer will say, yeah, I love your basic package, but.
[00:19:59] Speaker D: I need these other four features that.
[00:20:01] Speaker C: Are in the next package up. Well, then, okay, well, then you should buy the next package up. Well, I don't want to pay for the next package up. Well, hold on a second.
[00:20:08] Speaker D: If you need these features, why aren't you willing to pay for it?
[00:20:13] Speaker C: Right.
[00:20:13] Speaker D: What's the disconnect here?
[00:20:15] Speaker C: And that conversation is just not an emotional conversation. It's a help me understand it conversation from a reps perspective. And then what they're able to do is either upsell them or the customers decide, you know what, maybe I can live without those four features right now. I thought I needed them, but it.
[00:20:28] Speaker D: Makes it a much more streamlined process.
[00:20:30] Speaker B: Damn right. So everyone listening probably can reminisce about a conversation like the one you just walked through right now with a customer trying to get them to buy up or give them what they need. But I want to underscore this, because that segmentation, most folks out there are still on that small, medium, large type of breakup. It's a good starting point, but as you learn about what your customers are doing, like actually doing and what they need, that should start to evolve. And I'm glad you guys saw that. You started digging into it and started realizing these archetypes. These guys need this set of features and services and whatnot, and these others could use something else. So that's what I would say is a maturity line in pricing for a.
[00:21:11] Speaker D: Lot of companies, is to take that look.
[00:21:13] Speaker C: Yeah, that's a great point. I wouldn't think of good better best as small, medium, large. I would think of it as use case based and customer type based.
[00:21:20] Speaker D: That's a very good point. All right, man, take us home.
[00:21:23] Speaker B: So now that you got your packaging, you did all this data stuff. Let's roll it out.
[00:21:27] Speaker D: What happened?
[00:21:28] Speaker C: Yeah, so the other thing that we did is I can talk about the results, but the last thing I want to make sure we touch on is.
[00:21:34] Speaker D: We also implemented point of sale discipline.
You can do all the greatest pricing.
[00:21:39] Speaker C: In the world, but if it's not governed at the point at which it's being sold, sometimes you get these disconnects that happen. And so what we did was we built our pricing into the comp plans.
[00:21:49] Speaker D: For the reps, so we knew what.
[00:21:51] Speaker C: Our discounting curve should be, and we actually incented the reps where if they hit their discounting curve, they made their full commission. If they sold better than that, if they had less discounts, they actually made more money on a percentage basis. And if they discounted more, they actually made less money. So we put it in their comp plans. And I think that was super helpful. And then the other thing that we did is we basically gave the sales team a lot of autonomy and discounting. So reps had a discount level that they could do, then their managers, then all the way up to the CRO. So the idea is to give the sales team autonomy and flexibility to go.
[00:22:25] Speaker D: Execute on this, but then to also.
[00:22:27] Speaker C: Have sort of an escape hack. So then we would have a deal desk where we could review exceptions. But the idea is, if we did this right, the number of exceptions should.
[00:22:34] Speaker D: Be kind of minimal. And then we obviously put this all into our quoting system.
[00:22:39] Speaker C: So the guardrails were all there and all the workflows are all there. So I think having all of that in place is actually really important as well, because that's how you know that the things that you've thought of and all this great analytical work that you've done actually happens deal by deal.
[00:22:53] Speaker B: I'm glad you brought that up because that's overlooked. It's overlooked a lot. People get so fixated on the price, like the actual number itself and everything, they forget about these things around how the packaging works and how they align or these systems that help sellers win. That carrot and stick method works phenomenal. You give them flexibility, but maybe an incentive not to use it. Right. And you put really great guardrails in place. So exceptions are tracked now, you know, okay, what kind of exceptions am I making? And what that does is it informs your next iteration or wave of price changes. And when you see it, but you can't see it until you measure it. You can't measure it until you put those systems in place. So I think that's a key point most folks miss. Thanks for bringing that one up, man. All right, so take us home, man. What actually happened at the end?
[00:23:38] Speaker C: Yeah, I think we saw great results. We saw an average increase of over 50% in terms of our unit pricing that we were able to achieve. Our discounting went down by, I think, 25 ish percent, and we saw our.
[00:23:53] Speaker D: Win rates go up.
[00:23:54] Speaker C: So we were discounting less, getting more.
[00:23:57] Speaker D: Per subscriber we were selling, and we were winning more. Right.
[00:24:01] Speaker C: So it was sort of like you couldn't have asked for a better result.
And so we saw that lever move pretty dramatically, and it was a fairly significant improvement to our top line revenues and our bookings performance as a result of that.
[00:24:17] Speaker D: And so we obviously got a lot of value.
[00:24:20] Speaker C: Big bang, sort of like initially, and then we're continuing at it. We're continuously refining our pricing and continuing to measure. And obviously, the incremental benefits that have happened since that big order bank is smaller, but it's a continuous part of our overall process.
[00:24:35] Speaker B: That's just crazy, right? I mean, think about it. Winning more but getting more money. Your Asp is going up, winning more and getting more money at the same time. Most folks think you got to have to do the opposite. We need to plummet prices to get more wins or we need to capture more price. Our wins are going to go down the tank. But you were able to do both. And here's the big myth busting that I want to do here, right, is that if you're able to reduce that friction in buying and selling, if you're able to get better alignment between what that customer wants and what you're selling them in packaging, and if you have all those right incentive and systems in place for selling, you can do that, you can do both. And you are a walking testament to that, man. Thanks for bringing that piece up, man. That was phenomenal. And so I'm going to take us back now to present day, and I want to know, with what you have going on your pricing and packaging, what's really working well for you guys?
[00:25:31] Speaker C: Yeah, I think our overall process is working. The continuous nature of our process, I think, is working well. One of the things that we've done is we've stood up what we call a pricing council. So we have internally that group that I talked about, which was kind of the working group, that group is a living, breathing part of the company now. It's called our pricing council. It needs twice a quarter, and we review all the data that we've collected, the things that we're thinking about, and it's a great forum in which to hash this stuff out.
[00:25:59] Speaker D: And what you find is people are.
[00:26:01] Speaker C: Really opinionated about pricing and they bring amazing arguments to the table, and it's just awesome to have that dialogue going.
[00:26:09] Speaker D: I think the core principles that we.
[00:26:12] Speaker C: Adhere to, like reducing friction, making sure we're optimizing price, all of those still exist. Our business has obviously changed a lot over the last few years. Obviously, we've gone through an interesting time sort of in world history, which has put some pressures on us. But we've grown from being a company with just a handful of products to now we have a number of products. We've done four acquisitions ourselves. And so now our challenges are a little bit different in the sense that we are trying to figure out how to create bundles of all these products and price those bundles appropriately and deliver on those archetypes. And so we're continuously kind of experimenting. We do a lot where we'll do kind of like a special offer for a quarter, which is really us testing a pricing and packaging strategy to see if it sort of hits the mark. So that's all great. And then the third thing that we've done, or another thing that we've done is we've really leaned in on this notion of ROI based selling, which has been so important in this world, where companies are getting very focused on efficiency. And so a lot of the pricing work that we do, we've sort of memorialized in an ROI set of analyses and processes that our reps can use when they're talking to our customers. And so that's been super helpful.
[00:27:21] Speaker B: All those things, key components of a high functioning pricing team. That pricing committee. I always say every company I see who gets pricing right gets that meeting right, bringing in those heads of states having that healthy debate. I want to ask you, how often do you hold that meeting? Is it monthly? Is it quarterly?
[00:27:39] Speaker C: Initially it was quarterly, but we end up now doing it about twice a quarter. I think maybe it ends up being like six, seven times a year. But we've got a team that this is a big part of their job and so they're pretty good at keeping us sort of on task there.
[00:27:53] Speaker D: That's super.
[00:27:54] Speaker B: And then on the bundle it thing. Right. So a lot of companies who do.
[00:27:56] Speaker D: Start going into these phases of, okay.
[00:27:59] Speaker B: I've solved the problem, now I'm going to solve more problems and now I'm going to have more products that solves more problems. And you get that expansive piece, and you're right, the problem, pricing problem changes complexion as you start doing that. I love this experiment, iterative nature. You bring in a promo, you see how it works out. It doesn't fully get into your product suite, bloodstream until you sort of hit the metrics you want and then if you like it, great. And that informs where you want to go next. And so I think having that mindset is, I think going to be key. If you're expanding, if you're now serving your customers a bit differently, maybe solving more things for them. I think great tip for everybody listening today. So as we look forward into the future, right, I mean, you think maybe next two, three or five years from now, where do you think you want to take that pricing and packaging that your monetization model today is going to keep evolving? Where's it going to go?
[00:28:48] Speaker D: What changes do you want to make?
[00:28:50] Speaker C: The places where we want to improve are one is in our data capture, right? So we're getting in more and more data sources to inform our decision making. So we instrument our software to understand usage. So when it comes to existing customers and talking to them about pricing, we're looking at a lot of usage pattern data now to understand the value we're delivering to translate that into pricing. And then I think it's really just wrestling with the fact that we've got so many products and how do we bring those together. So I think that piece of bundling multiple products together is probably the biggest challenge that we're going to face as we move forward, and it's going to be the one that we're going to.
[00:29:24] Speaker D: Spend the most time focused on.
[00:29:26] Speaker B: That makes a ton of sense for where you guys are headed, I would say, exactly is one of the best, or I would say well run B. Two B SaaS companies that I've seen. You guys are just a freaking fine tuned, like, well oiled machine, and so I'd love to hear all that. I am going to put you on the spot, though. How many people would you say is.
[00:29:43] Speaker D: Dedicated to pricing right now?
So it's a team of about four.
[00:29:49] Speaker C: People, and this is not their full time job. Right. But we spread the sort of workload across three or four people. There's a leader of that team. So that's the person I spend a lot of time just asking, I'm sure, a lot of questions to. And they love that, I'm sure.
But, yeah, that's the size of the team.
[00:30:07] Speaker D: I would say, though, if I were.
[00:30:09] Speaker C: To sort of break down the hours over the course of a year, it's probably about one full time equivalent, maybe a little bit more of actual work.
[00:30:16] Speaker D: That we end up doing. Got it.
[00:30:17] Speaker B: So across those four, about one Fte. And that's big because I think a lot of folks may get under the impression, like, man, I got to hire an army in order to get pricing right. And that's not necessarily true.
[00:30:28] Speaker D: Right.
[00:30:28] Speaker B: You just need that someone to focus on it, obviously. Bring them all together, man. That's fantastic. And listen, man, I really want to thank you for coming in, getting raw, getting street, telling what really went on at exactly. And your successes, I'm hoping, are going to translate to successes for others. I do have to ask you, though, my final question.
[00:30:47] Speaker D: All right, my final question, which is.
[00:30:49] Speaker B: Tell me your favorite 90s hip hop song. I'm a hip hop junkie. Everybody knows who knows me knows that I'm all about it. I'm playing it all the time. Mine is the notorious B-I-G. Juicy is one of my favorites of all time. What is your favorite 90s hip hop song?
[00:31:06] Speaker C: I mean, I don't know if I would go with song. I'll tell you. Artists I would love to listen to tribe called Quest, and I spent some time.
[00:31:13] Speaker B: You tip?
[00:31:14] Speaker C: Yeah.
Listening to those guys, and I kind of have a thing for Eminem. I think he's super talented, so those would probably be the artists that I would talk about.
[00:31:25] Speaker B: Yeah, he's definitely one of the goats, man. Two, mad respect for both of those. Again, big thank you for you for joining us today and sharing the real and honest sort of journey you went through with pricing Arnab. I love it, and I can't wait to welcome you back in the future.
[00:31:42] Speaker D: And see how things turn out. Awesome.
[00:31:44] Speaker C: Well, it's been great joining this podcast, Marcos, and love the work that you and your team are doing.
[00:31:49] Speaker D: So thanks for having me.
[00:31:51] Speaker B: Thanks for joining us.
[00:31:52] Speaker C: See you next time.
[00:31:53] Speaker A: Thank you and much 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.
