The New SaaS Pricing & Packaging Strategy

Mini preface: I am in sales and not in content marketing so please adjust your grammar expectations accordingly as I am fitting in this blog post between lead processing and opportunity management…. ready, set, go!

While I am not helping bring modern work management to the world, I spend time thinking about pricing and packaging and the overall art of acquiring customers through dynamic pricing packages like; gold, silver, bronze, usage based billing, billing arrears, tier based pricing, volume discounts, freemium to premium, etc... Recently, data suggests a shift is necessary to further align packages to the buyers expectations. So, the purpose of this blog post is to share with you the next iteration of pricing and packaging for SaaS companies to acquire more customers.

Being in sales I have learned that typically the most important factor in any opportunity is to identify and empower your “champion” (See champion: http://www.inc.com/mark-suster/finding-your-sales-champion.html). You might me thinking, “tell me something, I don’t know.” Well, what if we could double, quadruple, quintuple, sextuple, octuple, nonuple.. (okay, okay you get the idea) the number of champions your salesforce has access to?! Wouldn’t that be awesome? Before we learn how, let’s take a quick look back at how we got here…

I would like to say that I was some awesome “sales hero” in my opportunities, but if you follow the school of the challenger, you will know that most buyers come to you when 57% of the work is already done in the engagement! So, if that is true, what can you do to help ensure you acquire customers and over perform? The answer is: develop and empower more champions. Arm your champions to mobilize people in their company. I can go into details on how to do this, but I want to focus more on what marketing and pricing and packaging can do to spawn thousands of champions faster than ever before.

The concept is simple, long ago we had “shrink wrap,” sku based software, we now have evolved to freemium to premium subscriptions (try now, buy later) model, and now the next evolution of pricing and packaging is what I call, “freemium to teamium” model. Say what?

Freemium-to-teamium:

Where SaaS companies offer free licenses of their services, free forever to the very first 1, 2 or 3 people to register with any particular domain. Yes, free-for-ever, no trial. By doing this, this creates an artificial demand to be first in line (nothing new as this was deployed by both Google and Pinterest), the only two requirements being actual ongoing usage and require a business email address. What this does is reward early adopters, gets them engaged on your platform and yes, make them champions!

Some opponents of this strategy may label this some “trojan horse” method, but in reality it goes back to empowering your champion to have the tools she needs to mobilize her team.

What does this mean for marketing? Lower cost per MQL because people talk and socialize to friends and colleagues that they need to claim the free accounts. How about for SDR teams? Well, now SDRs have a user/champion you can reference or leverage instead of prospecting cold.

This way the champion can trial, explore and evangelize without the pressure of ending a trial (if anyone has sold SaaS, just ask yourself how often you need to extend trials! Ugh!).

Some companies have already started this strategy like ebsta: http://www.ebsta.com/blog/pricing/ &

In summary, create your champion development strategy by evolving your pricing packaging strategy and deploy the “freemium to teamium” methodology. By giving away a few seats forever you will empower your future customer, create a shortage for your product, grow the number of low cost yet high quality leads, acquire more customers, and lastly give your sales development team a ally to evangelize with.

In his non-spare time Farzad helps customers modernize how ambitious teams work #workcloud #workflow