Episode Transcript
[00:00:00] Speaker A: 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 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 everybody, to another episode of the Street Pricing podcast. I'm Marcos Rivera and I'm an entrepreneur. I'm an author, also a pricing coach. I love this stuff. I eat it, drink it, sleep all day long. I love pricing. And today's guest I'm ultra excited about because this person has some real pricing stories to share. Former executive at Mailchimp at Callanly, this person has done pricing from end to end and I can't wait to hear what he has to say today. Joining me is Srinivas Suma Yajula. Srinivas, thank you so much for joining us today, man.
[00:01:01] Speaker C: Welcome, Marcos. I love it. Thanks for having me on the show. You know me, we've partnered a lot on a few things over the few years and I enjoy talking about this stuff and yeah, let's get real. Let's get street.
[00:01:11] Speaker B: We're going to get real and street first. Srinivas, tell them what you're up to lately because you're GMVP at Tropic now. So just a quick word on that.
[00:01:18] Speaker C: What do you do? That's right, I love what I'm doing these days. I am the general manager and VP at Tropic over all of our data solutions. So I love sort of bringing transparency to SaaS pricing and helping all those people trying to purchase SaaS software just get more equipped with information so they can get the best and right deal possible information.
[00:01:39] Speaker B: It's still the new oil in my view, right? It's all these oils, but info always takes the top for me. But today I'm going to give you a quick roadmap of where we're going to go into. Right. So first we're going to go back into the past. Rewind. Let's talk about a real pricing change that you did. I'm talking the struggles and the success, how you figure stuff out. We want to get real with all that and then we're going to bring it back to the present here. Talk about what's working from a pricing perspective, what's really producing a lot of results for you, and then we're going to go fast forward to the future. So what's next? What's going to change. And at the end, I'm going to come at you and I'm going to ask you, what is your favorite song? Bonus points. If it's a 90s hip hop song, by the way, keep that in the back of your mind here. But first, let's take it away. Let's start in the past. Let's rewind. Srinivas, tell us what you did, man.
[00:02:25] Speaker C: Absolutely. I would tell you the best experience I had going through a pricing change, and I qualify best as to your words earlier, going through an end to end experience of coming up with a strategy, doing the research, doing the analysis, and what better story than a story from calendly, the preeminent sort of product led growth software, well recognized brand globally. And I was fortunate enough to work with Topawatana, the founder CEO there in March of 2020. And that date is important because calendly had tremendous success years prior, growing exponentially, just 100% year over year. And then obviously with the pandemic starting in 2020 compounded that growth and just a lot of opportunity, just given the nature of the world and everything going remote. Tremendous experience there. So let's talk about that. So when I joined calendly, I led the product organization and then transitioned to leading growth in monetization and then ultimately leaving the organization doing a stint and turn as the strategy and bizops leader. So lots of experience, really understanding the organization from a product perspective, a go to market perspective, and bringing sort of that strategic thinking to bear. Right. So, as you know, my journey there, tope and I spent a lot of time talking know, where's the business going? Where's the product going? What are all the things we want to do? There was a lot of strategic considerations that were at play, whether it was thinking about International, thinking about going up market, thinking about various different go to market motions, just a lot of balls in the air. And the common thing I found amongst a lot of other things with that to make all of those successful is the most under discussed lever of pricing. And in my first six months there, after I sort of learned the business, learned the context, and grew into sort of having an opinion, I brought forward to tope and said, hey, I think it's time to look at our pricing and let's go take a look at the strategy there. And just to remind everybody of calendly, the product led growth brand, highly frictionless, highly viral. At that point in time, there was a freemium offering, which was pretty valuable, where a lot of people can get started and start getting the value out of calendly unconstrained. But then at the time, we only had two pricing plans. One was called premium, one was called pro. So that's the context. I'll pause there for a second.
[00:04:52] Speaker B: I remember all that and listen, man, tope is a cerebral dude. I met him several times. The guy is very thoughtful on everything he does. Shout out to tope, by the way. He's doing good stuff out there in Atlanta. But the big thing here is all the go to market considerations, all those can give you different paths when it comes to monetization. You're thinking about further cranking that engine down there. In the virality of the free and the sort of smaller acv type audience, you also have enterprise customers who are now beginning to catch on, right? Sometimes enterprise need a minute to get on there and you want to negotiate those sales cycles. Those unit economics are completely different, too. So animals are different. And you're getting just sort of laying out the land, making sure we understand as a company what do we want before we start going in and making sure that we pick the right pricing techniques and tools. So I love it. Good set up, good set up. Keep going. This is a great story.
[00:05:44] Speaker C: Absolutely. So with that sort of common alignment around the fact that let's go look at our pricing and understand what's going on, for me, it was around, I had this hypothesis of calendly is a great product that's got a very heterogeneous customer base, to your point earlier, we've got the one end of the single seats all the way to the upmarket teams that wanted to use calendly in various different unique ways. And as I started digging into the data, my hypothesis was, I have a sense that we're giving away too much value, but it was purely a hypothesis at that point in time. And obviously, we need to go look at the data, we need to look at, talk to customers and really understand whether that statement was true or not. So I set off the journey of the hypothesis there and a couple of sort of important points as part of that. Number one, if you think about a product led growth company and a brand like calendly, the success of calendly really anchored on this path of everything has to be frictionless. And when I mean everything, that's the entire part of the journey, how you sign up what you see on the website, to that onboarding experience, to that first event type creation experience, to achieve that value moment. So we set a principle going, well, why should that be any different? When we think about pricing and the conversion and the monetization moment. So first and foremost, it was all about whatever we do, anchor to that hypothesis based on the findings, let's make sure it's as frictionless as possible. So call that a principle, call that an objective, but just anchoring to some of these sort of guiding lights, if you will. The second thing was we had to do no harm to the customers. Right then that branches off into two parts. One is the net new customers that potentially would come onto this new pricing model. But also we had a huge base of existing customers that were already using the product. So whatever we did, we had to make sure we had a packaging and pricing model that the existing customer base could migrate onto because we didn't want to put any additional friction, any confusion, any of those sort of barriers in place for the existing customer base. Beyond that, we also did, going into the pandemic, look ahead and say, hey, this is an interesting market opportunity for us to support and enable our growth. So we got to move fast on this. And I'll double click on why I set that as an objective. And just to give you a sneak peek of what we'll go into, sometimes pricing and packaging changes are very easy to put together on a piece of paper, right in a PowerPoint, in a Google Slide. It's going to meet its constraints once you talk to an engineering team because monetization infrastructure is almost a second class citizen when you're thinking about product oriented things, but you want to make sure it doesn't become a handicap for you in the future. So again, going back to the fact that we have to capture that market.
[00:08:52] Speaker B: Opportunity, I got to underscore that for a quick second here, because you're right, you can sketch out whatever the hell you want in a figma on a PowerPoint or whatever it is, it's the actual execution of it that trips up a lot of companies, and the ones that we've seen do really well, do a lot of planning and thoughtful tests and prepare their steps to get it out there. Now, the first time, if you haven't changed pricing in ten years, it's going to be a little bit of a lift, I'm not going to lie. Right, let's not sugarcoat this thing. But after you do it again and again, it gets easier and you start building a muscle around it, which is a big thing that a lot of folks listening today wonder, like, how do I build a muscle around this, where you got to start somewhere? And so that first rollout, as daunting as it may seem dig in, plan it, put in infrastructure and make sure that you have something repeatable.
[00:09:39] Speaker C: So I love it. Absolutely. Yes. And then finally to sort of close it off again, to double down on this whole frictionless experience as you think about going up market and introducing some of these new go to market motions universally, I subscribe to this notion of make it easy to buy, obviously via the product and those conversion moments like we talked about, but also make it easy to sell. So for us as a product led growth product at the time, the selling vehicles or channels were obviously the website, the marketing, everything like that. But also we were building these upmarket AES and sales teams to actually be able to communicate the value and be able to present pricing as appropriate and then of course align on the core objectives of what you're after. Right. This is a kernel of a hypothesis that sort of triggered all of this. But the first step beyond that that we did to actually get into the tactical side of the business is, well, hypothesis is great, but what are we really after here? Is it ARR growth? Is it unit economics that we're trying to impact in some way, shape or form? Is it changing sort of landscape of new channels? And we want to figure out how to make all the channels coexist. Just aligning on a set of objectives.
[00:10:53] Speaker B: First, that is so hard for folks to do. I'm not going to lie. It is hard to sit down and nail it. So I always talk about going from hype to hypothesis, right? So let's push that out there. Let's put something on paper. Here's what I believe, right, this thing will happen if these conditions are true, blah, blah, blah, blah, right? You put it down there, you write it doesn't have to be perfect. And then from the hypothesis, the guiding lights that you talked about, right? Who are we? What do we stand for and what do we want as a company? So who do we serve? Right? And those questions, who are we? Like that self identity and who we want to serve, believe it or not, are very fuzzy in a lot of SaaS companies out there in b two B, still fuzzy. They found some product market fit, they've gotten some momentum, but they haven't taken a moment to step back and say, okay, is this really where our core mainstream skills are meeting the right customer, the economics working on both sides, is it scalable, viable, all those big things, right? And so because you're fuzzy in that front end area of who you are and who you want to serve, pricing can get really fuzzy too, even fuzzier if you think about it, right? So I love the guiding light, the hypothesis, and then the infrastructure comment, man, I tell you, it is not a trivial task to get new pricing out the door, even if you have a small customer base. But what paralyzes so many companies is that they do have a customer base and they're afraid to mess around and update the price. Some of them don't even have the confidence to raise the price because they're not sure if they deserve it. And I'll tell you this, because you have a product mind like I do, when you're advancing your product forward, when you're adding value. That's a wonderful thing. And a part of software that I love so much, which is why I only focus pricing in software. But here's the thing. When you know your product so damn well, you also know where the shortcomings are, where the skeletons are buried, all the warts on it. And so you kind of feel like, well, until we fix these 85 things, I don't want to charge or raise prices yet, but that's not true. From the customer's point of view, getting more value, you deserve a raise, go after it, raise that price. Thank you so much for bringing that up.
[00:12:51] Speaker C: Absolutely. And just to double click that a little further, one of the other things sort of I uncovered with this exercise was, and put out there sort of a secondary objective is we do have to scale that monetization infrastructure, not only to support this pricing change that might happen and to enable the growth, but also, to your point, we knew we're going to have more product innovations and I didn't know what those product innovations were going to look like and what correlating pricing model I needed to input. Right? Is it a seat space? Is it a feature gated thing? Is it a usage metered thing? What those things were. And I needed the ability to have that infrastructure to then correlate the product innovations and then be able to test and pilot and experiment. So this was sort of the opportunity to have two parallel pathing efforts of one, a no regret move was let's go fix the monetization infrastructure. Because whether we did a pricing change or not, I still want those other benefits of experimenting, packaging, looking at the product innovations, but also sort of a catalyst was, well, if we do a pricing change, I want that to go as seamlessly as possible. And we were also starting to see the discipline of, well, every couple of years, let's assume we have to at least deliberate pricing strategy. And every couple of years it can't take a couple of years to go bring it to life. Right. So it was sort of a moment in time where let's capture the opportunity, let's actually do things the right way to set us up to scale and grow every couple of years.
[00:14:22] Speaker B: It can't take a couple of years.
That is a good one because when I do talk to some companies, the rollout is so daunting long and that ramp up, you know, how much value they could have lifted off the table in that time frame. And when you think about all the stack of things you can prioritize in your SaaS business, this is usually not one of them. The pricing infrastructure just kind of everything takes real time and money. Right. Let's be real. So nobody's sitting around with looking for stuff to do. And so it's actually kind of a hard choice to kind of move that up the ladder and say, no, we're going to do this. And even though the benefit isn't like right in front of our face right away, we're going to see that benefit time and time again because it's going to allow us to accelerate great value capture.
[00:15:01] Speaker C: Absolutely. And I think when products typically start and then we can go into the tactical things. But just to leave the viewers with this one comment, it's really easy to take these engineer friendly payment processing systems and just plug them in and then say, hey, you know what? We've got smart engineers. We're just going to have them build subscription management capabilities and everything will, and we'll scale from there. That 1015 years ago, I think that's a very valid thing to do. But you fast forward to where we are today, the choices of subscription managers you have off the shelf to buy, the choices of sort of entitlement systems that you have to buy that can plug into all the payment processors. It behooves you to think about that architecture logically at this point in time because of the choices and the evolution of monetization infrastructure that has fast forwarded to where we are today, that you kind of have to sort of question the status quo behavior of the past and sort of see if you can do things differently. Because again, I understand for a lot of founders that success is to be determined, but you kind of have to assume success and sort of think that way. And I think if you can do it at scale early on, the better off you'll be. So leaving you with that last comment around infrastructure. But let's get into what did we do right. First step for us to me was just shut up listen and learn, right. And I had to listen from various different vantage points. Number one, customers, which was not an easy task because we're very heterogeneous customer base. So we had to do multiple rounds of sort of interviews, conversations, surveys to ensure we're getting the right population and sample that is truly representative of the heterogeneous customer base that calendly had. Secondly, is no regret. Internal folks, we've got the frontline teams, the sales team, the success team that hear a lot from prospects and customers. Let's go talk to them. Let's go find out what they're hearing, what the pulse is.
[00:16:55] Speaker B: That one's a little controversial though, because I've been talking to some companies, they're like, well, aren't our people biased? Aren't they skewed?
Don't they always talk about. Yeah, while your own opinion is interesting, you should be talking to customers. Tell me a little bit about why the internal viewpoint was important for you.
[00:17:12] Speaker C: Yeah, absolutely.
In any research exercise, you're looking for signals and any sort of things to go off of, right? So if you stop at just interviewing internal folks, then you're getting potentially skewed, biased points of view, but those internal folks will give you sort of signals to unpack further and understand. Right. But if you just stop there, then I absolutely agree with the statement of you're just going off of biased opinions and just internal sort of cognitive biases. But if you balance that out with customers, if you balance that out with, you can go as far as other competitive products and reaching out to their networks and pricing folks and peers in the SaaS just to understand how are you all thinking about pricing just to sort of bring different vantage points to it. I guess the punchline ends up being just don't stop there. You got to get a balanced perspective. And at this point in time we're just gathering feedback to understand what's there. My other favorite source is also beyond just talking to customers directly, support tickets. Let's go look at what's all the data. And in today's world where you've got generative AI that you can feed it all this information and say, give me a summary of any sort of billing support related things as opposed to during that time we were Excel spreadsheets trying to look at the text and sort of tag and do things. But I think we've come a long way there. So yeah, shut up, listen and learn.
[00:18:34] Speaker B: Just 3d box like that last one. That last one. Everyone listening, everyone listening, right. Can get an export of those support tickets, all that context, run it through AI, it doesn't matter which one, chat, GBT, whatever, and ask it a few questions, summarize and pull out some insights. And that can tell you a lot of things. It can tell you where the value is, where it's not, what's the next move? All those key things can really feed in and it's something I think folks listening here can do in a matter of days. So that's a golden one.
[00:19:01] Speaker C: I love it. Absolutely. Yeah. And also the other thing I like about just starting internally is just, again, we started with a kernel of a hypothesis. Again, let's go look for that feedback. What I love about all that is Monday I launch a survey. By the end of the week, I can have a PowerPoint deck with the feedback from the survey. Right. So rapid, agile, let's go get stuff as opposed to customers can be that easy as well. But that's a little bit more of a journey of making sure you have the right representatives set. And that can take a little bit longer than just a week, right?
[00:19:31] Speaker B: Yeah. Keeping it nimble, keeping it quick, doesn't have to take six, eight, nine months. Right. You can do this thing in a rapid, more a faster way. And I love that because I think folks find it daunting. Like, man, can I really, I'm so busy, my plate is overflowing. Can I even dedicate some time to even do this? If you break it down enough, just the way you were talking about it, Srinivas, I think they.
So that was a very rich rewind in history there, man. And you touched on the hypothesis, the guiding light, the infrastructure, the listen and shut up. But of everything you did, man, is there one key thing the audience should remember before we move on to play to the current times? Anything they should remember in that rewind?
[00:20:13] Speaker C: Absolutely. I think one is, while you're gathering that data, obviously be mindful of biases. Look for the have a clear hypothesis, have a set of objectives. Absent that, it's just a minefield of a lot of information, so it can detract you from your core mission. So just be mindful of that. And then, yeah, I think, not to harp on it more, but like the monetization infrastructure, if you're assuming success of whatever the findings are, you're going to hit that at some point in time. If you can spend some amount of capacity saying, hey, if our pricing and packaging looked like this, after this entire strategic effort, well, how long would that take to implement and just start getting some of that information early on? Just so you can plan for it.
[00:20:59] Speaker B: Like we talked about earlier, man, I cannot help myself. Right. I mean, from hype to hypothesis. Right? Get going. I love the mindset, that thing you said a minute ago around assume success plan for that, right. Which I think is also key. And then I love just being mindful of the minefield, right. And being able to plan around that, man, I'm telling you, you're full of it in a good way because you have so much good information. Let's bring it now to present day, present day play. What is working right now? Present day. Let's talk about that.
[00:21:31] Speaker C: Yeah. So if we were to fast forward, we successfully implemented the pricing change. We were able to successfully migrate all the existing customer base. Still staying on that episode of calendly. So when we talk about present, we're sort of going back in time and calling that present for a second. I think we were able to successfully do that. We impacted the unit economics very favorably. We actually hit the targets that we all financially modeled and whatever else. And at the time, during that, aligned to the objectives, we hit all of those core objectives that we were after. So we ended up landing, keeping that sacred freemium offering, but we were able to successfully add some new packages and then also bring on an enterprise sales oriented package that had a lot more sales support service sort of elements that are value metrics that I think sometimes are also underappreciated as value metrics. So it's not just your product features, but how do you decompose pre sales, post sales service experiences, things like that, and segregate your packages along those lines as well.
[00:22:34] Speaker B: Yeah, that's a fantastic point, too. It's not just about the value, but how they get it right. And then all those things wrap around. It counts a lot, man. So it worked. You're striking that balance right between that freemium, that viral network there on one end, and you also are moving harder into upper mid enterprise areas. A very hard, tricky balance to strike. And you did it. And you did it with also a huge base that you had to be very careful not to disrupt, man. Fabulous.
[00:23:03] Speaker C: Yeah. And we also did it, I'd be remiss not to call out the cross functional partners that we had to bring together to actually make it happen. Right. Everybody was very supportive, came along the change journey. We met on a weekly basis. I was the driver of it. We had program management in place to really help us sort of make sure all the parts and pieces were coming together. I mean, you're talking, how do I make sure customer success knows how to talk about the new pricing model. If a legacy customer is asking about it, if somebody's interested in the new packaging and whatever the enablement tools needed for CS, for sales, the monetization, engineering teams managing go lives, and there's a lot that happened there. But I'd be remiss not to call out all the cross functional partners that made it happen.
[00:23:48] Speaker B: It's a team sport. No doubt it's a team sport. A good captain can help get it over the line, but it is absolutely an effort with everyone included. So that very big important point there. So let's go into future fast forward. What is next, what's coming up, talk about maybe changes down the line or what you're thinking.
[00:24:04] Speaker C: Yeah, so I think a few things that we did during that time and then we'll talk about experiences at Tropic to date as well in the future. We knew we wanted to make this a discipline. We wanted to not just stop at doing the one pricing change, but making it a habit of one, just discussing it, what's working, what's not working, across all the different channels, across all the different go to market motions, even existing customers were still sort of being transitioned into the new model. So making sure we had a forum to talk about that. So I ended up at the time hiring a senior pricing manager. So somebody who's full time dedicated to driving these things, doing the analysis, bringing other teams together, supporting the product team on making sure they understood what the methodology was to figure out said new product feature. Where should it go in the pricing and plans? Because I love product people, I used to be a product manager myself.
I want to goalpost myself of how many users are using this and adopting and engaging with this thing. So the tendency is always like, give it away to everybody, right? But there has to be that opposing force that's pulling it back, saying, well, let's really understand what the willingness to pay is, what's the value? So hired somebody, successfully put them in the role, started sort of stitching together processes to integrate with the product development process, instituting a pricing committee that meets quarterly to talk about pricing at least, and then also setting the goalpost or milestone to constantly think about pricing and let's make changes.
[00:25:36] Speaker B: Srinavas, my viewers will throw tomatoes at me if I don't ask you this question. Okay, how did you find that senior pricing manager? Because that is such an elusive role. It's so hard to fit. How'd you find dick? 30 seconds. Doesn't have to be that long. How did you find that person?
[00:25:52] Speaker C: Yeah, it took a lot of. It's easy to write the JD and say, here's all the purple squirrel things I'm looking for. Right.
But it took a lot of me really scouting LinkedIn and really looking at various different companies within SaaS, outside of SaaS, and I was even sort of struggling to find the right person. So I had to go through that experience of, let me talk to some people outside of SaaS as well. And are there portable skills that I can bring over here? Because the pool of SaaS people are very limited and the ones that are there are very senior. So really trying to find that right person was challenging. Right. But I got super lucky and after going through that process for a while, found somebody. But it takes a lot of LinkedIn scouting.
[00:26:37] Speaker B: It was a grind. I get it, man. I get it. That's super value stuff here. And just to take us home, man, because you went through a full blown end to end, thoughtful journey. And listen, if I was sitting down, if I was a SaaS founder, listening to this today, friggin write up those notes or turn on that AI notetaker and start producing some summaries, right? A lot of good stuff just packed in here today. But my biggest question of all, thing behind the scenes here since the beginning is tell me that favorite song of yours, man, growing up, what was the favorite song? Bonus if it was hip hop in the where I grew up. Yeah.
[00:27:15] Speaker C: Well, I'm going to take you top of the decade, LL Cool J. Mama said knock you out.
[00:27:19] Speaker B: I just heard that jam on doing one of my workouts the other day. It pumped me out, man. I got that last extra rep just because it was on.
[00:27:26] Speaker C: Yeah, it's an amazing song. I love LL cool J. It was a choice between that and Jay Z, money ain't a thing, and Jermaine Dupree. Money ain't a thing, but had to go with top of the decade for the 90s.
[00:27:38] Speaker B: That's got to be your Atlanta roots right there with JD over there. But for me, listen, great choices all the way. And just phenomenal that you were able to come today and share all the great things you did at calendar. Some of the things on, I'm thinking about tropic and kind of how that fits into the picture of infrastructure. That makes a ton of sense. And I could see why you're so excited about working there. So everyone listening today, please listen to this a few times, take some notes, run it through your AI, whatever it is, and learn something, apply something. Because this is where a lot of the real talking street adds the value. So for everyone here today, thank you for joining us. And please take this information, use it, and stop that guessing and start growing. Until next time, we'll have you back.
[00:28:22] Speaker A: 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.
