Dan Martell - May 16, 2016


Value Based Pricingļ¼š How To Use a Pricing Axis To Grow Your SaaS Company's Revenue


Episode Stats

Length

4 minutes

Words per Minute

193.42915

Word Count

942

Sentence Count

39


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Transcript

Transcript generated with Whisper (turbo).
00:00:00.000 Music
00:00:10.440 Using pricing access to grow your SaaS company.
00:00:13.520 In today's video, I'm going to answer the questions,
00:00:15.140 how do you increase your revenue?
00:00:16.920 If you've got a SaaS company, you're wondering,
00:00:19.060 how do you capture more value for the value you created?
00:00:21.780 How do you deploy deeper into the organization
00:00:25.920 so that you can increase your lock-in?
00:00:28.520 And all of those come down to different pricing access.
00:00:31.980 You know, recently, Brian Halligan,
00:00:34.180 the co-founder and CEO of HubSpot,
00:00:36.260 one of the latest SaaS companies to go public
00:00:39.220 and just totally kill it, incredible company,
00:00:42.060 big fan of Darmesh and all the people that work at HubSpot.
00:00:45.300 And he wrote a great blog post about startup to scale up,
00:00:48.840 and he shared the whole story of HubSpot.
00:00:51.720 And in one section that I just thought so fascinating
00:00:54.300 was the argument that all great SaaS companies
00:00:58.120 that have been able to scale their businesses,
00:01:00.120 they've had multiple pricing access.
00:01:02.800 That means they had multiple ways to generate revenue
00:01:04.900 from their customer, and what Brian noticed
00:01:07.560 is in HubSpot, they only had two.
00:01:09.540 And the average company at scale has four to five.
00:01:13.100 So what I wanna share with you guys is the four
00:01:14.540 that I think all of you out there
00:01:16.740 that are building SaaS companies can implement
00:01:18.580 to really get the most value from the customer.
00:01:20.840 The first one is plans, right?
00:01:22.180 Which pretty much every startup SaaS company has plans, right?
00:01:26.620 Most of them have three tiers, they have a high price plan,
00:01:30.160 they try to get people to subscribe at the mid tier.
00:01:33.000 And some of you at the enterprise level
00:01:34.420 might even have a fourth plan that's kind of like,
00:01:36.900 click here to kind of have us contact you
00:01:39.260 for a special quote because that's for these big companies
00:01:42.500 that might have needs around security and support
00:01:45.240 and service level agreements, whatever it is.
00:01:47.080 That's like your really high end price point.
00:01:49.280 So the first level, the first axis is just plans, right?
00:01:52.680 Have you optimized those plans to really capture
00:01:55.080 the most value from your potential customers.
00:01:57.420 The second one is number of seats.
00:01:58.980 How many customers, accounts, users can use the product
00:02:02.920 and having those fixed in your plan so that
00:02:05.400 if they need more, that's another way for you to upsell
00:02:08.500 and increase the revenue by selling them more seats
00:02:11.460 to their product.
00:02:12.300 So that is a no-brainer, a lot of companies do that.
00:02:14.660 The third one is add-ons, right?
00:02:16.300 So think about your product.
00:02:17.760 Is there any enhancements that you can make
00:02:20.140 around the usage, the data, the workflow
00:02:23.580 that it's either something you've built internally
00:02:25.960 that's an add-on, or it's something a partner's built
00:02:28.660 that you can sell on their behalf
00:02:30.340 and create a partnership there to do rev share.
00:02:32.840 Whatever it is, it's an add-on
00:02:34.320 that enhances the core product.
00:02:36.420 That is the third area of pricing access
00:02:38.820 that every SaaS company really needs to investigate
00:02:41.080 to increase that revenue.
00:02:42.020 And then the fourth one is other services, you know?
00:02:45.940 And the gold standard for this in my world,
00:02:48.520 in the SaaS world especially, is Salesforce, right?
00:02:50.660 If you think of Salesforce,
00:02:51.900 They're the world's best SaaS company
00:02:54.980 and their core is the CRM,
00:02:56.440 but they have several other divisions
00:02:58.660 from social to support to marketing
00:03:01.660 and these different clouds, they call them,
00:03:04.400 are other services that you can add on.
00:03:06.460 And what's great about it is if you can get a customer
00:03:09.120 buying your core product, in Salesforce case it's a CRM,
00:03:12.340 and then buying another marketing component
00:03:15.000 or buying the support cloud as well,
00:03:18.080 you're gonna increase their adoption of your technology.
00:03:21.180 all the interfaces are similar, the integration is similar,
00:03:24.560 and you're gonna get better lock-in for your customers
00:03:26.880 before they decide to make switch to another product.
00:03:29.120 So having other services, and if you don't have them,
00:03:31.840 here's a really great opportunity for you
00:03:33.880 to look at other partners that might have solutions
00:03:37.120 that you can partner with and add them
00:03:39.020 to your add-on services for your salespeople
00:03:42.080 to really create the most value for your customer.
00:03:43.800 This is really thinking strategically
00:03:46.280 about where is the value that we could create,
00:03:49.000 enhance that value, create more value
00:03:50.900 for your customer than anybody else on the planet
00:03:53.600 and you're gonna win.
00:03:54.440 So just real quick recap, you gotta ensure
00:03:56.900 that you have the right pricing structure
00:03:58.360 around your plans, the right number of plans.
00:04:00.240 The average is three.
00:04:01.240 If you wanna go four for that high-end one,
00:04:03.240 the number of seats that you allow per plan
00:04:05.460 and then upselling the number of seats
00:04:06.960 is another pricing access.
00:04:08.300 Add-ons, so what are enhancements and features
00:04:11.040 to the product, for example.
00:04:12.500 I know a lot of email solutions out there.
00:04:14.340 One of their add-ons is to provide social data
00:04:16.460 on top of those email addresses or CRM tool.
00:04:18.940 That's a great example of an add-on
00:04:20.600 that they can charge per email or per batch of email.
00:04:24.100 So that's a great add-on.
00:04:24.940 And then the fourth is other services.
00:04:26.640 You know, what other products do you have in your company
00:04:30.820 that you can sell as part of your core
00:04:32.580 or partner with other companies that offer that,
00:04:34.540 create that partnership.
00:04:35.720 If you want to receive more videos,
00:04:37.280 exclusive invites to events and whatnot,
00:04:40.360 subscribe to my newsletter.
00:04:42.380 I'm really excited to have you here.
00:04:43.660 Be sure to subscribe to this channel
00:04:45.000 to get more information about building your startup.
00:04:47.500 And as per usual, I want to challenge you
00:04:49.120 to live a bigger life and a bigger business.
00:04:50.920 I'll see you next Monday.