Startup Pricing Demystified: Lessons from a Global Pricing Leader
with Agnes Rahardjo
Agnes Rahardjo began her career as a working student at NavVis in the Global Customer Experience team, working closely with the C-suite where she learned the tricks of the trade quickly and later became their Senior Pricing Manager. Today, she is the Global Strategic Pricing Manager at PayPal, an international fintech giant. In this interview, Agnes reveals her top insights on pricing for startups — dive in!
How would you describe the importance of pricing in an (early-stage) startup?
Pricing supports a startup in achieving product-market fit by establishing key indicators of success. At the early stage, a startup has more freedom to experiment with its pricing as it is usually very agile and may have less pressure (at the beginning of its journey) to achieve specific financial goals. This gives the Pricing Manager leverage to work with leadership and try out different strategies.
💡Tip: During this period of flexibility, don’t shy away from asking clients for feedback on how they mentally calculate the value gained from your product, as well as what they would be willing to pay and why.
How did you get into pricing?
I attended a seminar on behavioral pricing, which made me realize pricing is a highly strategic lever for a business yet underestimated. Shortly after, I found a position as a User Product Analyst Working Student in the Customer Success team. My focus was to look at how to price different services based on customer usage. This turned into a full-time role with a product (SaaS) focus as the company scaled.
💡Tip: Deep dive into customer usage data to craft a pricing strategy that resonates with your audience.
When should a startup consider hiring its first Pricing Manager?
This varies, but ideally when the startup is close to finding product market fit because the Pricing Manager will increase the alignment between monetization and product strategy. If this individual is hired too late, the risk is that the implemented pricing strategy might not have been thought through from a strategic perspective.
💡Tip: Don’t hesitate to pull in pricing expertise early enough to be effective.
What function should pricing be within a growing startup?
Ideally close to the leadership so that the Pricing Manager has visibility on the entire strategy. This can be reporting to the CEO/in the CEO office, or in Strategy, Sales, Marketing, or Product. If the individual sits outside the CEO’s office/Strategy team, then they must be given autonomy to look at pricing from a wider strategic perspective and not only from the perspective of one function.
💡Tip: Strengthen communication channels between leadership and the pricing manager to ensure their strategy is in alignment.
How can you help your startup’s Pricing Manager grow?
Give the individual as much context and exposure as possible, i.e. shadowing the Sales team, working closely with Finance, participating in user testing, spending time with a customer to understand how they are using and creating value with the product or service.
💡Tip: Encourage your pricing manager to take a hands-on approach so that their familiarity with all functions informs their decision-making.
How can you help your startup’s Pricing Manager to have an internal impact?
Leadership should support the individual in building their influence inside the organization, as it is a highly cross-functional, and oftentimes, lateral leadership position. If the startup decides to change its pricing strategy this will be a change management process driven by the Pricing Manager. All hands need to be “on deck.”
💡Tip: Facilitate lateral communication channels with the pricing manager.
For more tips on pricing management, Agnes recommends:
- Monetizing Innovation: How Smart Companies Design the Product Around the Price (Book)
- Impact Pricing (Podcast): On Spotify or Apple Podcasts
- A Positive Typology of Irrational Decision Strategies for a view on irrational behavior effects on pricing (Article)
📣 Interview by Jay Harris-Theis, VP People Earlybird Digital West, and edited by Elisheva Marcus . Thanks for reading. Stay tuned for more expert insights on startup success!
