This course will give you the growth skills, knowledge, processes, and frameworks to confidently build and grow a product-led business.
In just six weeks, you'll be able to:
Wes Bush:
Hello, everyone. So, my name is Wes Bush. I'm the host of the ProductLed Summit. And today, I have Chris. And so, Chris is one of those people that's if you have a pricing problem and you're a technology or fast growing company, you really want to talk to Chris. Because in a fast growing technology company, there is the... If you think about the 80/20 principle, there's some things you can focus in on that are just going to have a profound impact on your business. And pricing is just one of those big issues that you really need to hone in on.
Wes Bush:
And more specifically, whenever it comes to your pricing strategy, your pricing metrics are that 80/20. Those are the most important things you can focus in on to really refine your pricing. And really if you get it right, you can get expansion of your revenue and customers that stay around for much longer. And so, that's why I'm so excited to have Chris on to talk about how he really approaches pricing metrics. And so, before we really dive into this talk, I want to just hear from Chris. How did you get into pricing?
Chris Hopf:
Well, thanks Wes. Looking forward to this as well. So, how I got into pricing? The short version is I've really been in pricing at every company I've ever worked for. So at a young age, I worked at a grocery store and initially as just a courtesy clerk bagger. But as I worked my way up in management, I had a manager that really opened me up to being able to test pricing even in the grocery store at a very young age. So even at 18, I was changing pricing in grocery stores. And this was before a lot of the technology type advances that we see today.
Chris Hopf:
But a number of different industries, whether it be wholesale electrical distributors to elevator companies to software companies, all the way up to at Microsoft. And so, as in September of 2010 that I left Microsoft after about five years there as an FTE. And that was really because I was posting on Twitter, my username is pricing, I was posting things and people started reaching out to me and just asking me of questions, asking me if I could help them. And that was really from around the globe. So, I've been doing PricingWire ever since then.
Wes Bush:
Awesome. And so, whenever it comes to the topic we're going to be going through today, would you just be able to kind of go through why are pricing metrics so important and also just what are they?
Chris Hopf:
Yeah. So, the reason pricing metrics are so important and oftentimes they're actually referred to a lot of times in the software space, people referred to them as value metrics. But I actually think there is a distinction between what a value metric is and what a pricing metric. And so, a value metric is really something that you can tie and that your customer or your prospect will really relate and associate value with. It's something that is part of how they do business and part of the outcomes in which you create that they care about. But a pricing metric is very much so could be a value metric, but it's not all your value metrics. And so, you have to be very intentional and careful around what you choose to be your pricing metric.
Chris Hopf:
And your pricing metric quite probably obviously is really when a customer consumes or uses more of this, they pay you more, or if they consume or use less of it, they pay you less. And again, there are a number of value metrics that you could use. And I certainly encourage you to identify what those value metrics are. But then you need to decide of those value metrics, which one should we actually use as pricing metrics. And oftentimes if you see within a context of a good, better, best type scenario where people have really differentiated their offerings, that is one of the key ways in which you can differentiate. And for example, contrast what a good experience might be in relation to what maybe a better or best experience might be.
Wes Bush:
Okay. And so I guess on that note, what is the premise then? Let's say you get your pricing metrics right. What can happen for your business?
Chris Hopf:
Well, I would say that there's really five signs that really kind of should be a trigger to whether or not your pricing metrics are performing as well as they should be or as well as it could be. And so, I'm going to just share my screen here. And we can take a look at what those top five are. So for example, if you're seeing a low conversion rate or a low win rate depending on how you acquire a new customer that could be either a no touch type scenario, and so that's where you're looking at a conversion rate or you could be looking at maybe a high touch, and that's where you're looking on win rate. If you're seeing in either of these cases, number one, two, three, four, or five, if you are seeing a scenario where it's trending downwards or maybe it's just not performing as well as you thought or think it should be at this time, it's probably a good sign that you should probably take a really intentional, very careful thoughtful look at how you've approached your pricing metrics.
Chris Hopf:
And there really could be a opportunity for you to see some significant improvements in these areas. Again, your conversion rate, your customer acquisition cost, a lot of times I've seen many clients in many different industries, whether it be enterprise or small serving even consumer B2C type scenarios, where they choose a pricing metric and they've actually got a little bit too clever. They thought that they wanted to differentiate perhaps themselves in some way by taking a different approach or they've made it just too complex. And so, those are just, again, some opportunities to really question yourself. Is that possibly why we're seeing a long sales cycle here, or we're seeing a low conversion rate, or we have a low annual contract value? Even when it comes to time to renew a customer and retaining a customer. If it just doesn't seem to make sense, they maybe given you the benefit of the doubt, and so they've chosen you.
Chris Hopf:
But then when it comes time to renew it, just for whatever reason isn't making sense to them, it's not really tied to the value that they associate with your business. And so, when it comes to paying for it, there's just a disconnect. And again, that could be a sign that your pricing metric is wrong or could be improved in some way. And then also, just certainly this is going to affect your customer lifetime value when you think about one through four about how that's going to affect the performance of your business.
Wes Bush:
Okay. And out of all of these top five signs, what are the most common ones that you see again and again where people just keep having these ones, and are the most I guess biggest leading indicators of, yeah, you got to fix your pricing metric?
Chris Hopf:
Yeah. Well, it really has varied. So one example, I worked with a enterprise software company and it really was that example that I touched on previously, where they really did get too clever with their pricing metrics. So just to give you kind of a broad example of kind of what they were doing, they made it so that there were different user types, and so the enterprise customer would pay for different types of users. But if a customer wanted to add a certain type of user, they would also had to add this other user and then use this multiplier. And so, it really got too complex.
Chris Hopf:
And again, it's somewhat surprising that they even found themselves making the decision to go down that route. But certainly, their customers were starting to push back. They really were seeing some renewal and retention and even expansion. If you think about the impact to your ability to get a customer to see the opportunity to impact their business by choosing to do more business with you by upgrading or adding on services or other solutions or modules that it really could be linked directly to how you're approaching your pricing metrics.
Wes Bush:
Okay. Yeah. No, that's really fascinating. And so whenever you have one of these issues, what is the next step? We've identified, all right. We have the wrong pricing metric. But what do we do about it? What's that first next step that someone could take in a organization to really take the next level and then just start thinking about what could that right pricing metric be?
Chris Hopf:
Yeah. Right. So, I would say that it's not only a scenario around where they pretty confident that they have it wrong. But I would also suggest that using what I'll go into here on this call is this pricing metric decision guide. This really come out of my work with a number of different clients over the years in a number of different scenarios, and different industries, different geographies, and so forth. And so, these are really a set of questions to ask yourself. Not only to ask yourself, did we get it wrong?
Chris Hopf:
But also to just maybe check yourself to see if maybe there's some other opportunities that for whatever reason you didn't prioritize looking into more closely and they maybe an opportunity for you to see even better performance. So, I'll share this guide. And so, it's easy to download on my website. There's an example as well as a blank. And so, we'll just go through that now. And I'll just kind of walk through those 11 tests, if you will, to just kind of, again, check your existing approach or check your thinking around your existing approach and other options that may perform better. All right.
Wes Bush:
Sounds good.
Chris Hopf:
So here's what the guide looks like, and here's what it would look like if it was just blank. And just I'll go into the example here shortly, but just really quick to give you a lay of the land. These are the different questions or tests you want to again, ask yourself in relation to the different options you may list here. It could be per user, could be per gigabyte, could be data retention. Again, there's a myriad and quite a number of different ways. And once you start thinking of maybe your existing approach, you can even start what I recommend if where I give you an opportunity to do 10. But just start capturing any that come to mind so that you capture them and you don't forget to go back. And at least go through these tests and uncover the ones that may actually perform best or better than what you're currently doing. So [crosstalk 00:11:18]. Go ahead.
Wes Bush:
[crosstalk 00:11:19] been there. But for those that don't really understand what are some of those common pricing metrics, do you mind taking a minute and just going through some of the examples that you already had pulled up, just so people can quickly see what that pricing metric looks like in the wild?
Chris Hopf:
Oh, sure. Yeah. Good idea, Wes. So, some of those examples where a lot of companies are certainly familiar with Drift and what they're doing. And they've recently announced that they went away from really having a pricing metric around the number of contacts, which is common if you think of marketing type solutions like Marketo or HubSpot and so forth. So, the number of contacts. So that, is it will be interesting to see how that plays out for them. But as you can see here, if you just look at their different plans, their different pricing, chat seats, right? This is the number included. And then if you're going to add seats, so they really do have a pricing metric around the number of chat seats, as well as the number of calendars, right? And so if you wanted to add additional calendars, then you're going to pay more. And they believe that you will pay more because you associate the value of adding a calendar is just going to make the impact that's meaningful enough that you're going to be willing to pay that.
Chris Hopf:
But now in the case where previously there maybe different thresholds of number of contacts. Now, they're really trying to take that out of your decision-making process and just saying, they believe that this will help them, that just don't let that constrain how you're using our solution, use our solution for as many contacts as you want. But this is an example of where you need to be careful around if you don't use a value metric as a pricing metric. It's really important that you don't necessarily ignore how speaking to and reinforcing the value, in this case, that Drift provides around your ability to manage and optimize and really get the most out of your interactions with your contacts. And so, even though they aren't pivoting right or pricing based on contacts, it's still important to reinforce the value and the impact their solution is having within the realities of how their customers are using their solution to manage and get the most out of their interactions with their contacts. So, does that help?
Wes Bush:
Yeah, absolutely. Thanks for going through that.
Chris Hopf:
Yeah. So another example, if you look at, for example, Datadog, again, it depends on the type of solution and the way in which you're using the capabilities that they have to offer. But in this case, if you chose infrastructure, it's going to be per host, right? Per month. In this case at APM, per host. But look at here, log management. So it just didn't make sense within the context of the nature of this solution for them to go maybe per host, and it's probably obvious. But in this case, per million log events, right? So that's how they've really set themselves up to kind of make it as easy as possible for you to not necessarily experience friction in your thinking about using Datadog for log management, because they think that per million log events probably makes some sense to you.
Chris Hopf:
And then if you look at synthetics in this case, per 10,000 test runs. Well, we could perhaps touch on these when I go through the example guide. But Vidyard in this case is just there are by plan, right? The Vidyard calling out whether or not this is constrained by the number of users and so forth. If you look at Wistia as an example, right? They're going by a plan, includes 10 free videos, right? And then basically, there's an additional charge if you add a video at 25¢ per month. Slack, we're pretty familiar with Slack and how they've somewhat disrupted the way the per user pricing in the sense that they've added this element of per active user. And many of the viewers of this presentation are probably familiar with how that goes down. And the reality is around if you have less active users, that's really more of a credit. It's not they're actually giving you a refund, but it's a credit that you will apply in future.
Chris Hopf:
Clubhouse, again, per user. In this case, one to 10 users. And then when you bump up, they're charging you slightly more. But in a sense, it's basically per user as a pricing metric. Mattermost, same, per user. And that gives you probably an idea of maybe some companies that people have heard of or using today around how they've approached pricing metrics. But again, the list is somewhat endless around how different companies approach pricing metrics.
Wes Bush:
Definitely. And what are some of the mistakes? For instance, I look at the Datadog example and I see for the log management, it's per 1 million log events. Maybe it's really easy to tell that. How many log events you have? But I think I'm paying a dollar 27 and it might end up being, if I have millions and millions of logs, it ends up actually being really expensive. So, how do you kind of balance that? Picking a value metrics, something that, yes, you can charge someone based on that versus, is it easy to understand?
Chris Hopf:
Yeah, exactly. You've touched on in a sense some of the tests. So, why don't we walk through those now and give you an idea. So, here's an example of this would be just within the context of a video type software solution. And so, they were considering or they could have considered by charging by the number of viewer hours, right? Or the number of concurrent viewers, bandwidth, channel/event pages, right? So, depending on how they messaged those. They could refer to them as channels or they may refer to them as event pages. The data retention term. Again, overall data storage. Or even maybe this concept around number of broadcasts, or number of events, or number of shows. It really may depend on the vertical or the segment of customer that might be using their solution. Okay. So in this example, what we'll do is we'll walk through these tests. And as you can see at the top here, this is really thinking of it of each of these questions or tests within the context of your customer's perspective.
Chris Hopf:
And then on the other side is going to be within the context of your company's perspective. And just really quick to give you a sense of kind of how this can benefit you perhaps visually is just using, again, simple conditional formatting in Excel. But if you see a lot more green on the company's perspective side than you do on the customer's perspective, well, that's probably giving you a signal and just telling you, "Hey, what are we really trying to do here? Are we really trying to put ourselves in our customer and our prospect's shoes and really understand how they may be affected and think about how we're going to go to market and charge for our solution?" All right. So the scoring here, just to give you an idea. And again, if you have any questions on this, there's certainly within the pricing metric guide. I have some just kind of some help topics here that you can scroll through if for some reason you do use this. I do recommend that you do. But you can reference that.
Chris Hopf:
But aside from that, let me just give you an example here. I've weighted these. And I'll touch on that feature. And you can change that weight if you want. But just so you know, if you see these weights, there's a reason these are weighted higher, and we'll touch on that. And the other thing about the scoring is the way you want to approach this. This is certainly subjective in some ways, and it's also relative. And so when you're thinking about scoring viewer hours in relation to concurrent hours, you may go through and score viewer hours. And then as you go through this, you may say, "You know what? Based on how I'm thinking about this, I may need to score this differently." That's part of the process, okay?
Chris Hopf:
But don't get too hung up on getting it perfect initially. Go through it, do an initial assessment. And so if you're going to score something a three, it basically means that you could tell somebody else, your co-founder or somebody else on your team, and you could say... Or even your customer. You can make a case, a really compelling case around why you think viewer hours in this case is relevant to the business of most of your target buyers, right? And if it's a one, then you can say, "You know what? We can't really give as many examples, and it maybe relevant, but we don't necessarily have a lot of examples and feel super confident around how we're scoring this one." And then, zero is not just simply, zero, we can't give an example. But also just force yourself to actually challenge yourself to actually give a reason why you're scoring it a zero. We want all of these to be as meaningful and helpful as possible.
Chris Hopf:
So in this case, let's take viewer hours relevant to the business of most buyers. When you think about who the customer would be for, if you think about maybe say like a livestream or Ustream back in the day, one of those live broadcast type video type solutions, would viewer hours be relevant to the business of most buyers? And you would probably say, yes. You can make a case for that. And would you say, does it apply across the range of most use cases? So if you think about all the ways in which people might use a solution like that, would viewer hours really apply? And you would probably say, yes, it probably does. Because the number of people actually viewing our content, whether they're viewing it live as it happens, or whether they're viewing it after it has happened about what happened live, still you want to get in a sense around if you're creating content or experiences like that is how many viewers are actually viewing that content in order for it to achieve whatever the objectives of producing that content or that event in the first place was.
Chris Hopf:
And so that's why you could probably give, be pretty confident, you'd give that a three as well. And is it relevant to how most buyers experience value in use? And so in this case, yes, you could say that as well. Because most people if they're viewing the content and they're valuing the content, then they're going to spend more time viewing that content because it continues to grab their attention or inform them in some way that's meaningful. But is it easy to understand? Well, maybe not as much because a lot of people, just in general, the public, again, depending on the different type of viewer segments you may be going after or their customer may be going after, it may not be really how they think about experiencing video content. And so in some cases, you may say, yes, in some cases, no. So, we're going to give that a one.
Chris Hopf:
Now, is it easy to estimate and forecast? And again, these two are weighted this way because they are super critical. And time and time again, these are the tests that you really want to land on a three at if you possibly can because it really is going to impact not only people considering trying, doing a trial with your solution or choosing to buy your solution or choosing to stay with your solution. If it isn't easy to understand and if you can't de-risk it in some way in the sense that's easy for them to forecast, then you're really probably going to run into some sort of barrier or hurdle to actually getting them to, again, sign up for a trial or to convert to you as a customer or to continue using you because it just doesn't seem right and relevant. I'll stop there and see if you have any thoughts, Wes.
Wes Bush:
Yeah. No, I really like this approach where it's weighted as really more scientific of going through each of these, embedding each of the value metrics. Because I think a lot of people, they just try and pick what it is, and it's totally just a guess. And in this case, you're really just trying to understand from the customer, as well as the company's perspective, does this really make sense? And on some of these, I can see all green. And then on the company's perspective, it's all red. And that's perfect because you want to understand can you actually enforce this and really make it work for your business. Because you can have the best value metric from the customer's perspective, but it might backfire on your perspective, which is interesting balance to really maintain.
Chris Hopf:
Yeah. And again, this isn't going to necessarily give you some sort of magic. At the end of the day, this is what your pricing metrics should be. But it certainly is going to put you in a much better position. Number one, to feel more confident around your existing approach or around your planned approach. Or it's going to really uncover maybe some opportunities that maybe you didn't prioritize or give enough time to really look into that may actually perform better.
Wes Bush:
And so for picking the pricing metrics, I know in most organizations there usually isn't someone who's full-time dedicated to pricing. And so whenever it comes to kind of figuring out your pricing metric, who actually should be going through this?
Chris Hopf:
Well, in many cases if your organization has a role like a product marketing manager, typically those are the type of individuals that have the exposure to the breadth of the stakeholders. And certainly the customer as well is key there. But also other stakeholders within your organization to really at least go through this process. And then, presents maybe the ones that are most likely to perform and then get some additional feedback from other stakeholders. But ultimately, whoever's making the pricing decision in the organization should also be making the pricing metric decision. But certainly encourage and highly recommend that it be a team effort because just one individual's scoring of this, it may not uncover other considerations that other people's perspectives may have and may offer, and that are really relevant and important will actually affect the performance. So on that website page, I do touch on maybe just four different scenarios in which how to use this.
Chris Hopf:
And one would be just one individual goes through this. And then with the team, they kind of walk through this together in a meeting right around and they can have that dialogue around it. Another would be maybe having a list of options to consider on the left-hand side going down one, two, three, four of different approaches, either your existing approach and maybe some other ones that you're considering. And then, have every some key stakeholders each score it individually. And then, you come together and see and have a dialogue around maybe why you scored them differently.
Wes Bush:
Okay. And so whenever you are going through this, you have the customer's perspective and the company's perspective, and obviously they're both really important, but how do you really decide which ones should you choose? And whenever it comes to your value metrics, because obviously it's all green on the customer's perspective, and it's red on the company's perspective, you're going to have really a hard time making it work. But what's the kind of balance that you're looking for whenever you decide like, okay, this is the one we're going to put on our pricing page and charge people based on?
Chris Hopf:
Yeah. So, I guess it's somewhat revealed here by just the ones that I've weighted higher. So again, if you're scoring low, but your customer scoring high, that's not necessarily a bad thing. But you just need to be aware of what the reason why in which you scored it low. Just the realities around what that means for you as a business, right? And so, understand that there's going to be trade-offs and it's better to trade-off in favor of your customer. But certainly not trade-off in favor of your customers at the expense of you being a sustainable and growing business. And so, it's really important to think through those trade-offs. And so, you could key on these ones, right? So for example, revenue scales with customer success. And so, as if you think about in the sense of why people approached number of contacts for marketing solutions, the idea in a sense was that these marketing solutions would enable the user, the customer to improve their marketing efforts in a way that they would expand their contacts, right?
Chris Hopf:
They would grow as a business. Thus, they would have more contacts in the database. And thus, they would associate the increased value with the solution and be willing to pay more, right? But then in this case, if you don't charge, if the revenue doesn't scale with the customer success, then just be aware of what that does as well. Because there maybe some other realities around your customer getting a whole lot of value and not being charged for it. And yet your company not getting any type of return on that value that you're delivering. And the same with encourages increased use. I did a podcast interview. And a gentleman by the name of Mark Stiving, who some people may know in the pricing world as well. And he brought up another way of maybe saying this around encourages increased use.
Chris Hopf:
And he said that maybe it discourages less use less. I know that sounds kind of funny. But again, because what he was saying is that, well, do customers really actually want to pay you more for something? What is the scenario? And so that's where he felt like maybe it just taking that messaging approach around discourages decrease use less. But I would suggest to you that... There's a lot of talks sometimes or there's been many posts and opinions around charging by per user. [crosstalk 00:29:58]-
Wes Bush:
Yeah. I was just going to mention that.
Chris Hopf:
Yeah. And I would suggest to you this.
Wes Bush:
Yeah.
Chris Hopf:
And again, I understand that there's certainly reasons, and perhaps using a tool like this, you can uncover things or options that may perform better in some ways. But here's what I would suggest. Why would somebody ever even want to add a user? And I would say that there's always, if you're willing to make it, you could always make a convincing and compelling case around why somebody would pay for an additional user.
Chris Hopf:
Now, key is how much you charge for that additional user, right? So, that is where some people... So in the case of Drift, they were charging in some cases $20 per additional user or I think 35 and so forth. So again, it does matter where you go with the pricing on per user. But I would suggest to you that if somebody is going to share a login, right? There's a reason that they're sharing the login. One is they believe that somebody else in their organization using your software is very valuable to them that they're willing to have somebody else share the login. So, that's where you just want to make sure you're having the right conversations and putting yourself in the position to understand where you can go with the pricing for that additional user.
Chris Hopf:
So it doesn't perhaps... Because any of these pricing metrics you choose, it's going to affect behavior without a doubt. And so, it's really important for you to think that through. I think this guide will really help you take into consideration those key trade-offs and really help you make a better informed decision around, okay, this is why we're choosing per user. And this is why we're charging this much per user. And have a hypothesis around how you think that might play out. And then, go out and put yourself in the position to understand how that's going to perform. So, does that help?
Wes Bush:
Yeah, absolutely. And I love this approach because even if you're someone new in your company, you can really use it and take a more scientific approach to really understanding what is the best pricing metric. But I want to hear your thoughts on how do you take that next step. So you go through the guide, you really kind of narrow down like, okay, these are some of the pricing metrics that we should really consider. You find the ones that's according to your decision guide are really the ones you should definitely prioritize. How do you get this onto the website and really get your team on board to update your pricing?
Wes Bush:
Because it's not just as easy as updating thing on the website. There is obviously systems in place and developers you need to talk to, to make sure that you can actually enforce this. And so, I'd love to hear your thoughts. And just how do you get buy-in? Because I see so many companies just get to this point where they know they should update it, but they don't because they get shutdown. And so, how do you get buy-in? I want to hear your thoughts.
Chris Hopf:
Well, yeah. It's similar to that hypothesis approach, right? So if you think that you have an approach that might perform differently, and in most cases obviously you would choose an approach that would likely perform better. And so, how can you actually make a case for why you think that would perform better? So say you are transitioning from, well, a number of my clients are trying to even think through, does it make sense for us to go from a straight up per user pricing metric and adopt the per active user approach? And so, why would we want to do that? Why would you even consider doing that? And the reason would be is that in some way you think it might perform better. And why would that perform better? Why has it performed better for Slack? And some would say, well, what it has done is it has de-risked it for the prospect or the customer.
Chris Hopf:
They can put their users in the position to not have this concern around, wow, they aren't even using this and yet we're paying for it, right? So, that's the top two fears any buyer, whether it be B2C or B2B or even B2G, any buyer, it's us in our personal life and it's us in our business life, is not getting what we thought we're paying for and paying more than we needed to. And so, we're always trying to sometimes perhaps subconsciously just kind of de-risk those two scenarios in our minds when we're making decisions. And so per active user, in a sense de-risks that because it kind of de-risks the scenario in which we're paying for more than we actually use. And we're only paying for the value that we're getting, in this case, people using the software.
Chris Hopf:
But here's the thing to your question is how are we going to actually execute that, right? So that's where on this other side here, is it simple to measure? Well, you're going to have to define what an active user is. And that may vary depending on the nature of your customer, the nature of your solution, and how people interact with your solution, right? So, those are some key considerations is how easy is it actually for us to measure. And then, is it easy for us to actually enforce? And so, those are some of the things that you're going to have to consider. But what I would suggest to you as far as maybe taking another step around answering your question, if you can speak to each of these in your rationale around why and how you came to your decision around, in this case, moving to proactive user is likely going to perform better for us, then make that case.
Chris Hopf:
But then also include in that, I would suggest around just an action plan, or an execution plan, implementation plan around how you would want to approach that. And that might be if you're more of a medium or high touch is that you know we're going to pick this salesperson. And because we do proposals for our customer and they can't necessarily just choose a plan on our website. Let's test it out with our next 10 opportunities with this key salesperson, because they're going to really give it the best chance to perform. And let's see how it performs. Let's see what type of objections we get. Let's see what they say and how that performs. And then, have that be a part of your timeline around your execution plan to kind of pilot this out, if you will, and test it to see how it is.
Chris Hopf:
I don't recommend that you just kind of go all in and just kind of roll the dice and see what happens. In some cases, if you're a startup and you're going for more of a self-serve type scenario, where depending on the traffic, you get to your site and so forth. You might be in a position to kind of test some of those out. But I certainly don't recommend that you actually test price, the actual dollar amount that people will pay. But you certainly can test out different approaches to your pricing metrics or offerings. And even more importantly, where a lot of companies don't spend the time is they don't spend time really improving and fine-tuning their messaging.
Chris Hopf:
Because messaging is what sets up your offerings to perform in the minds of your prospects, to understand why you're selling the way you sell and why they can buy the way they can buy from you. And then, it also sets up the pricing. And so, one thing that I often say, it's not the price they don't like. It's what they understand they are or they are not getting for that price. And so many people think they have a pricing problem, and more often they have a messaging or, in this case, a framing messaging problem around the pricing metric.
Wes Bush:
I love that. And yes, it's just really comes down to as well as what people see when they buy. The first thing they see is the price. They don't see the copy or any of the other indicators. Like there's that wine test. If you don't know wine and they give you or they tell you it's a really expensive bottle of wine, now they just see the price. It's like, you're just buying based on price. But when it comes to SaaS is you're really buying based on value and how it can really help you. So unfortunately, it's not that easy when it comes to it. You really have to have good product marketing and pricing aligned with it.
Wes Bush:
So yeah, that's perfect. And thank you so much for going through the pricing metric decision guide. This has been really kind of fascinating just to see how you go about this whole process. And really understand for the customer, as well as the company's perspective. What do you need to take into consideration whenever it comes to deciding your pricing metric? So I will be including the link to this guide, so everyone at the summit can download it. And then, I also want to hear, where is the best place for people to find out more about you and ask you all of those amazing pricing questions?
Chris Hopf:
Yeah. Well, it's easy to find me either on Twitter @pricing, or you can certainly just go to my website, pricingwire.com. I get people that sign up for, just for example, a strategy session. And I've never talked to them, people around the world, just recently from another lens. So, that's one way to do it. But certainly happy to if somebody is using the guide in some way or starting to use it, just email me, chris@pricingwire.com. I'm happy to help and reply back and give you a sense around just maybe helping you take those next steps. And then, we can go from there.
Wes Bush:
Definitely. And I will mention, I have one of my SaaS friends reach out to Chris, book a strategy session with him, and he just raved about how good Chris was and how much he helped him with his pricing. So if you do end up booking a strategy session, it's definitely worth it. So with that, I'll end this amazing talk. But thank you so much, Chris, for taking the time to share what it really takes to build pricing metrics and really find what those are for your company.
Chris Hopf:
Sounds great. Thank you, Wes.
