Kyle Poyar at OpenView has proposed a new set of SaaS metrics to better measure Product Led Growth and diverse revenue streams. What are these new metrics? What do they mean for pricing design? Is Value to Customer (V2C) the missing metric?

The SaaS business model has matured. With this maturity comes slower growth, more competition, more scrutiny by buyers and procurement and the need for better price management and customer value management.

There are many ways to think about pricing as a game. One that helps us align pricing with innovation is the open game. What does it mean for pricing to an open game? How does it change how we build pricing capability?

We will be making extensive use of AI in pricing. In fact, we have been using some form of AI for many users as revenue management and pricing optimization engines are based on one form of AI or another. By the past year feels different, and the next three years will be different. What are the requirements for the ethical use of pricing in AI?

With six levers to use to improve NDR where should you focus your effort? Make sure churn is under control then look for where you can have the biggest impact.

The sixth NDR lever is churn management. Churn is the great enemy of SaaS businesses and understanding why churn is happening and how to reduce it is a critical part of managing a SaaS business. Churn is the denominator in the equation for customer lifetime value.

The fifth NDR lever is reducing downsell, where customers move from a more expensive to less expensive package. How can one avoid this, or at least minimize the impact? We explore this challenge here.

The fourth NDR lever is avoiding, or minimizing, package shrinkage. One thing that can reduce NDR is reduction in revenue from an existing package. What can we do to eliminate, or at least minimize, in package shrinkage?

Join Karen Chiang and Steven Forth for a webinar on tactics to improve Net Dollar Retention, sponsored by Vantec, WUTIF and EFund. May 11, 2023 at 8:00 AM Pacific Time.

Generative AI is attracting a lot of interest as an innovation platform. How will generative AI be used to create value? How will that value be priced?

The third NDR level is to promote cross sell. NDR applies at the customer level so cross selling will improve NDR. Cross sell can include both value added services and additional product lines. Both can have a big impact on revenue and profitability.

We have entered an AI renaissance. What flavours of AI will have the biggest impact on pricing over the next three years? Here are the top three candidates: predictive analytics, computational game theory, large language models.

SaaS pricing is sometimes described as data driven. It is actually model driven, with data being the raw material used to build and adapt the models. It is the interaction of three models that guides pricing. The value model, the cost model and of course the pricing model itself.

Companies optimizing NDR have six levers to pull, three positive, three negative. In this post we look at the second of the positive levers: driving upsell across packages.

Companies optimizing NDR have six levers to pull, three positive, three negative. In this post we look at the first of the positive levers. Grow in package.

To optimize Net Dollar Retention (NDR) one needs to track package performance closely and optimize monthly. What should be tracked? What actions should be taken?

Digital transformation requires digital pricing. Digital pricing is model based, data driven and adaptive. Digital transformation will not be transformative if it is not based on value.

Many organizations will discount software subscriptions before they discount professional services. The logic is you have more room to discount where you have high margins. This is a strategic mistake and reduces long term profit and weakens competitive positioning. Discount professional services before software or data subscriptions.

Pricing has important transition points across the technology adoption cycle. How you think about value and use it to shape your pricing strategy changes as your buyer’s motivation changes. It is critical that leadership, investors, product and services managers and marketing understand these transitions and price products or services appropriately for them

Emotional and economic value drivers are both important in market segmentation and pricing design. This is especially true where goods like water is involved. WaterTrax (part of Aquatics Informatics) has been thoughtful and effective in designing its pricing.