My internship at Ibbaka was my first exposure to pricing consulting. At the start of my internship, I was introduced to the concepts of ‘value metrics’ and ‘pricing metrics,’ Value metrics are the unit of consumption that provides value to a user or customer. Pricing metrics are how something is priced. I was asked to identify the value metrics for different B2B Saas companies by looking at their pricing pages. This was difficult, as the answer was not always black and white. To find the value metric, I had to position myself from the perspective of the customer. Sometimes, the pricing metric tracks the value metric, but there are cases where the two are not perfectly aligned. Fences are used to guide customers into one tier or another and often to push people into the next tier up. It is important to be able to distinguish between a fence and a pricing metric. Distinguishing between value, pricing metrics and fences can be key to understanding a company’s pricing architecture.
I learned that good pricing is fair, transparent, and consistent. In order to accomplish this, customers should be able to understand how the price was derived, the company should treat customers within the same segment the same way, and the company should communicate the value it is providing to the customer. As well, pricing needs to be constantly measured over time. Good pricing has to be measurable, whether it be measuring quantitative goals or measuring qualitative data. A company needs to check its goals over time to verify that its pricing design is still effective.
During my time at Ibbaka, I discovered the power of analyzing qualitative data. From speaking to members of the Ibbaka team, I gained insight into the process of collecting and analyzing surveys to conduct market segmentation. By collecting the results of surveys, Ibbaka is able to learn about how different segments respond to questions and make inferences about value, thereby gathering valuable information that supports effective pricing decisions.
The greatest challenge I encountered was analyzing the data I collected and looking for trends. I was asked to collect data about the pricing pages of B2B SaaS companies and to document the value metrics, pricing metrics, fences and the shape of their pricing curves. Just by eyeballing the data, there were no obvious trends that emerged. While there are certainly patterns in the data somewhere, we will have to use software to find them. Fortunately, Ibbaka has a set of data analysis tools they have coded in R that help find the hidden patterns in this sort of data. R is a computer programming language often used in data analysis and machine learning.
As a company in its early stages, Ibbaka has been a very welcoming place to work at. In a relatively flat hierarchy, collaboration is strongly valued and everyone’s opinions are taken into consideration. Ibbaka is a great place for an intern like myself to learn, as I have had the opportunity to speak with people who work in different functions and all contribute to a project. I was able to learn about how different pieces of the puzzle come together and discover more about my own career aspirations. I am confident that Ibbaka has a successful future of growth and expansion in the years to come.
All in all, my time at Ibbaka has been very educational and rewarding. I have been able to learn from successful mentors who provided me with advice on breaking into the consulting industry and adapting to the future of consulting. Connections are important in consulting and I am very grateful to go forward in my career with the connections and knowledge I have gained at Ibbaka.