AMA: Airtable Senior Director, Portfolio & Engagement Product Marketing, Christy Roach on Pricing and Packaging

1. Fully agree that pricing is tough. I’ll add my own point of view on top of that: pricing is tough and there is no “good” pricing. I have been lucky to work at 5 great B2B SaaS companies, and each of them have had frustrations with pricing, gone through pricing changes, and knew that there were aspects of their pricing model that customers didn’t like. As the folks that drive messaging around that pricing, this is super important to get internal clarity on. So often I hear folks say “can we just create some messaging around this?” and while the answer to that question is always, yes of course, there is no messaging that will fix every customer complaint on pricing. 2. In terms of knowing if you’ve gone the “right” pricing pre and post launch, I’d say to think about the following: 1. Pre-launch I’d focus on answering the questions of: Does this pricing and packaging make clear, intuitive sense for the customer? Does it address complaints or issues we know they’ve had in the past with our pricing? Overall, will this change significantly impact a portion of our customer base in a negative way and, if so, do we feel okay with that and have we thought through what we’ll provide to those customers to ease the pain? On top of that, make sure your partners in data and finance have done the modeling not only to show financially what the pricing will do for the company and how the changes to packaging will impact your customer base. Last, try to test your pricing and messaging with a select group of customers (maybe from your advisory board or your most loyal community members) to get a sense of how the change will land 2. Post-launch: Be very clear about what feedback or customer complaint is expected as part of this change or what would be cause for concern. As a PMM, this has been my most useful exercise. When you define this up front, there’s less concern and panic when those complaints start rolling in since you prepped folks internally to be prepared for them and prepped responses to customers. From there, data should be your friend. You should have a strong data partner who is there to report on the impacts of the pricing and packaging change based on the success criteria you set out, and highlight trends or areas of concern that you want the group to keep an eye on. Additionally, especially in an Enterprise company, see how your customer-facing teams are feeling about the change. I firmly believe that sales morale is often a one way door, if they are super unhappy and feel unsuccessful with the pricing change, it’s usually a good sign you need to do something about it.

I assume this new pricing model often comes with packaging changes. My hot take (maybe not so hot) is that packaging is much more important and impactful than your dollar price. If you’ve implemented a change in pricing and packaging, use the changes in packaging to drive adoption and upsell. Maybe there’s a new feature on the new plan types that you know customers want, you can use that to encourage them to adopt the new pricing plan. Maybe there’s more power available to them in the next plan up that you think is highly valuable for them, focus there. Can often be convinced to spend a little more if they feel they’re getting value and getting the conversation out of price and into value is the best way to get folks to get over sticker shock and focus on the needs of their team.

1. There are so many questions you could ask but I’ll give you a few: 1. Why do we want to go enterprise? How does landing with the enterprise land in our stack ranked priorities? Ask these to figure out how conviced your company is about going into the enterprise. You want to figure out if moving up-market is a mandatory priority versus something they’re interested in exploring since that will impact how you do this. 2. Do we believe that our product solves a clear need for Enterprise customers? Do we have features that are already meeting those needs and enterprises already finding some success with our product? What gaps do we have in our product and how will those be prioritized on the roadmap? 3. What are we willing to give up to win in the Enterprise? Would we be willing to miss our SMB targets in order to make this happen? This helps you understand how to load balance across the portfolio.

1. Not to get too philosophical but I find there’s often too much focus on who is the “decider” on pricing and often not enough alignment across product, finance, data, product marketing, and sales around how we all work together on pricing. At this point, I don’t feel strongly that my team needs to own pricing, so long as my team is part of the core pricing working group and leadership team that weighs in on pricing. I’ll also say that in much of my experience, whether PM or PMM “owned” pricing, the ultimate decider was the leadership team and, more often than not, went up to the CEO for big decisions so “owning it” gets amorphous pretty quickly in my experience. 2. That said, I am sure you’ve done the thinking about why you want to own it and if you land on PMM leading, I’d go about in two ways: 1. Show how your ideal pricing leadership group and process works: Rather than just focusing on PMM leading, show what the cross-functional group looks like and how you propose decision making. Map out who is responsible for what and how each team collaborates to ensure success over pricing as a whole rather than the piece they’re responsible for. Show what problems this solves when compared to the current system to help folks understand why this works. Basically, show a vision for the future that works for the whole org with PMM at the center, rather than pointing out why PMM has to be at the center. 2. Show a vision for the pricing program as a whole: A leader I worked for once said “the person who best describes the pain earns the right to solve it”. While he was talking about messaging, the same holds true in my experience for internal alignment which is 80% of being a great PMM. So, in this case I think one of the most important ways to earn the right to solve pricing is to present a clear vision for where pricing is at and should be going at your company. In pricing work, folks usually follow the person in the room who has the most experience and has a vision for pricing that everyone can rally behind. So really showing why you’re right to lead based on the work rather than based on the internal politics or justification goes a long way. 3. Sometimes, just start leading: I don’t mean come in and declare you’re in charge. Instead, I mean often pricing work gets messy and stressful and PMMs can show up as a leader in how we point out work that needs to be done and start leading it. I’ve had many folks not really understand why PMM should lead until they went through a pricing change with me. Probably the best time to make this case is when folks are able to see what PMM leadership looks like in action.

1. This is one of the hardest types of pricing work that I’ve done. The biggest things to me were: 1. Understand how interconnected these products should be: Do you expect these products to be used together frequently? Are they coexisting with one another and can be used on their own or is the best customer experience to use together. 2. Align on attach goals: Understand how important it is for your customers to use all of your products together. Are the company’s goals more focused on getting new customers/revenue no matter what products are used, or is there a desire to see the attach rate of using multiple products? 2. Based on the above, you’ll be able to decide to focus on pricing that gives incentives to use the products together if your goal is attach and usage, or price each product competitively to let folks decide which products they do and do not want to use without heavy upsell to multi-product.

1. I’d actually prioritize messaging your overall product and what your vision is for the full functionality of your product. I say this mostly to point out that having messaging that’s wildly different between plans usually means you need an overall messaging framework first. 2. That said, I always think you should be messaging the full value of your product when it’s at it’s most powerful, and encourage prospective and current customers to use the best version of your product. When you show the power and value provided in your paid product as your overall message, you’re putting your best foot forward.

This is a GREAT question and one that I don’t think a lot of PMMs are asking. My take: Your overall product positioning is about so much more than your specific features or your price. It’s about what your product does. What problems it solves. What value it provides to the business and the buyer. It’s a higher level narrative. That said, your positioning needs to understand and reflect the “why” behind your pricing. You need to be clear how your overall positioning works for each plan and what the translation of that overall message for users on a specific plan, as well as what value they’d get (pulled from overall positioning) when moving to the next plan.

1. Quick note that in most of my experience, new features are rarely “priced” as a standalone charge unless you’re launching an entirely new solution to the market, so when you’re making the decision you’re often deciding which pricing plan the feature goes in. In that world here’s how I go about it: 1. Start with personas and clear frameworks for which customers should be on which plan and what the plans are for, what value each customer should get on each plan, and what should and should not be possible for customers to do on that plan. 2. From there, understand your competitive landscape and how other solutions on the market package similar features. You’re not always going to go in line with what your competitors do but sometimes taking a look at the market provides a pretty clear answer. 3. Then, line your feature up with your overall messaging framework. Who did you build this feature for? What plan best solves the needs of that audience? What painpoint does this feature solve? And which plan(s) are socued on solving that pain? How is this feature different than what’s on the market today and does that warrant a premium pricing plan? 4. Usually, you’ll weigh competitive, messaging, and product factors and a fairly clear answer will present itself. That said, you almost always need to discuss that decision with a group to make sure. Sometimes what might seem logical on paper is actually pretty hard to implement or difficult for the customer in actuality. 5. Bonus points: Make a framework/template for each PM and PMM on your team to do together as part of their launch process to help streamline how you make packagin decisions.

1. For single versus bundled solutions I usually make a process for the PM & PMM to determine: 1. The goals for the feature in usage and revenue 2. What the best customer experience looks like and our recommended usage path, as well as what the customer experience looks like for users if they only use one product 3. Data and modeling about what each pricing decision will do for our overall revenue and how that fits with our goals (this isn’t always required but is for big decisions) 2. Early adoption/discounts/trial conversion incentives: My biggest framework and advice here is that you test your way into what works for your company. You should be running frequent tests and experiments with your pricing as a whole and specifically on incentives to be able to understand the impact it has on conversion, adoption, monetization and more. Use the readout on results from each experiment as the litmus test for scaling up or discontinuing.

1. “Enterprise” can mean so many different things to different people. An enterprise plan and enterprise customer are not always the same thing. I’ve worked at PLG-focused companies where Enterprise has actually meant more of a commercial or mid-market customer, and at other places where you’re working with true enterprises with tens of thousands of employees. The first step is being clear about who that plan is for and what they need. From there, it’s determining if each feature fits that ideal persona/company profile for the enterprise plan and if the functionality is built for customers like them. I really don’t recommend putting everything into enterprise for the sake of “differentiation” because it leads to really unclear packaging for the customer and they’ll feel like you’re gouging them on price. 2. Tactically, a good rule of thumb is that security, administrative, and governance features are often enterprise-only. Things that give you organization-wide control or that a company would use to coordinate across multiple departments are often good candidates for enterprise plans.

A lot of great content in the market, specifically on Sharebird and PMM groups. I’ve also learned a lot by meeting up and talking pricing with folks across product, PMM, and finance who work on pricing to swap stories and get their insight. Do a lot of digging online about how your competitors and products in your industry price their offerings so you can understand how your product fits in. If you’re looking for a book, I don’t have a ton but the book Predictably Irrational by Dr. Dan Ariely is an interesting look at how we make decisions that helped me start to put together a real POV on pricing and customer decision making. Good luck!

1. Usage Based Pricing is popular for many reasons. I don’t have the exact answer but my hunch is that there are more and more products built to be use by broader swaths of users than there used to be. In this world, a software bill can often get bloated with folks who signed up or got added to a software system once, but never logged in again. Having usage based pricing ensures folks are only being charged for the users that actually get value from their product. This helps customers get over the fear that they’ll be paying for folks who don’t use the software and makes them more likely to add more users to the tool. It’s attractive for customers who are good at keeping active usage high as they’ll often see a high NDR (net-dollar retention) from customers expanding their usage. It can be risky, however, if your company sees inconsistent active usage from your base. 2. I’d say switching pricing determines on how folks use your product and what your priorities are (cost per user versus volume of users).

Without a ton of context on how your company works and what the decision making process looks like, I’d say my biggest advice on what to do here is to lay out the full business case and options. When I hear a big flag from a VP of Sales that there’s an issue, it’s important to pause. It doesn’t mean you’ll always do exactly what sales needs, but sales morale is a hard thing to keep and if you need these folks to succeed. I’d map out the reasons for the price increase, the data and reasons it makes sense, the risks it has, and how other teams will be impacted to see the full picture. I’d bring that full discussion to a leadership room with all the invested VPs and above to help you all as a group determine what to do. It’ll rarely work to hear a concern like this from a VP of Sales and just plow ahead.

1. Going upmarket is hard, but important to do. I think increasing your price and tackling a new customer segment should always start by looking through the product lens. The biggest first thing is to define the overall value your product brings (or would bring) to a larger customer base. While a company will have an overall messaging framework, messaging to a larger audience usually requires a different approach and often a tweak in how you message your overall value. Once you do that, you can take a look at your current product offering and see which features already fit the profile and needs you’ve mapped out. This can also guide your future roadmap and think through things you need to add to make sure your product solves the needs of these larger customers. Often, these features are around organization-wide control and governance as well as certifications like FINRA or SOC-II compliance. 2. Once that’s done, you’re ready to start tactically planning. You can decide if you want to make a new SKU for your pricing plan (probably an “enterprise” plan) that houses the features you already have available to just those customers or keep your current pricing and just start going after larger customers in your GTM efforts. You can then decide how you want to increase your prices. I’d recommend competitive research, some customer/potential customer surveys to generate insights, and financial modeling to understand how the new pricing will set your company up to hit their financial goals for the year and if you’re a sales-led growth company, test run with a few sellers and sales leadership. Then you’re good to start tactical execution!

1. Where to start! Here are some heavy hitters: 1. Enabling your team is as important as every other step of planning: Pricing and packaging is vital for your customer-facing teams to know and be resourced around. Usually, one training meeting isn’t going to cut it so make sure you adequately prep for that 2. Just because the change impacts a small % of customers doesn’t mean it won’t still be painful: I’ve been in situations where we’ve felt fine since we’re deprecating a feature that only his 1% of our customer base, only to realize they’re some of our best customers or to underestimate how much this will hurt the customer. You’re there to be the advocate in the room to make sure you’re unpacking who these customers are and what they need from you 3. Be clear in your plan for legacy customers: A lot of folks feel fine honoring legacy pricing because it’ll make the rollout easier, only to slow their engineers down by adding a ton of tech debt, missing key revenue targets, making rollouts a nightmare for GTM teams, or some combination of all three. Make sure the plan is clear and will work for the customer and for your org. 4. Don’t expect miracles: Cynical as this sounds, it’s super important to be realistic in knowing that you’ll still hear complaints about pricing, it won’t work for everyone, and your numbers might go down before they go up since your revenue engine has not been optimized for this new model, it takes time. Pricing is hard and there is no good pricing so an overhaul is great but it’s not going to fix every problem and that’s okay.

1. There are a ton of “intangibles” that we often refer to when talking about what makes a product valuable. A huge factor in this is user experience and the design of a software. In B2B PMM, one of the biggest shifts I’ve seen over the past decade plus is that customers expect the ease and beautiful design of a consumer product at work. I’ve sat on win-loss calls where VPs and c-suite executives say they chose a solution for their team over another because of the design and usability. 2. I’ll also say that design plays a HUGE role in your in-product monetization. The way you work upsells and upgrade experiences into your product without making it overwhelming or a turn off for customers will heavily impact the type of upgrades and monetization you see from your product activity.

1. I’ve seen pricing owned by PM, PMM, or finance at different companies. The world that has worked best for me is Product Management as overall directly responsible team or “owner” with PMM as a key stakeholder and part of the decision making group. This is likely because I’ve spent much of my career at product led growth companies where product’s decisions will always highly impact pricing and growth is a part of how the product is built. I essentially see it like this: 1. PLG or product-led company: If you’re in this situation, having product own pricing is going to be clearest and most effective to make sure pricing is woven into everything you do, not just a side program. 2. Sales-led or more enterprise focused: PMM is often a better fit here because they have much more context and alignment across GTM teams, product, and customers. They can ensure customer-facing needs are taking into account and the pricing should work primarily for these sellers while also keeping the product experience in mind.

1. Too many to count! I’ll give you a rundown of my top ones: 1. Keep the conversation focused on value not price: The more you focus on price, the more the customer will. The more you focus on value in your messaging, the more your customer will see your product as valuable 2. Get really clear internally about what this price change is supposed to do for you: Making sure everyone is on the same page of goals, non-goals, and expectations for this pricing/packaging change will give you the aircover you need to not spent too much of your time dealing with misalignment or internal concerns 3. Be clear that there is never perfect pricing: Messaging can’t fix everything. In almost every circumstance, there will be customers who are unhappy with the change, make sure your internal team is clear on that and doesn’t see customer complaint as only a messaging problem and get clear on what compalints are expected and okay versus cause for concern 4. Make sure your customer facing teams are well equipped: This means messaging and often a deck for sales, talking points for success, and macross for support but it also means making sure they understand the price change, they feel good about it, and they’re prepared for it. Just creating the materials is the start, but pricing is often made or broken by how customer facing teams feel and implement it 5. Focus on packaging more than pricing: The price may change, but the value comes from the features and functionality available to the plan. Make sure you’re really thoughtful about why each feature goes in each plan 6. Create messaging around each plan, not just the change: If you’re in a multi-plan pricing system (ex: Free. Premium, Enterprise) then your messaging work should focus on who each plan is for, what they should be able to do on that plan, why they would upgrade to the next plan, etc. The work is NOT just about making messaging for the change itself, it’s setting your pricing up for long term success 7. Capture and record learnings from each change: Future pricing and packaging changes are inevitable and they often happen every 18 months - 2 years in a company (sometimes more, sometimes less). Mistakes and missteps are inevitable and usually fine but you need to make sure you learn from them and put those learnings into a playbook for next time.

1. You’ll likely have a shortlist of the competitors you go head to head against. They should always be on your checklist and the folks you look at most closely. We always use them to checkpoint the packaging of new features, study why and how they make the pricing decisions they do, and go as far as to do frequent teardowns of their pricing page and pricing model 2. There are likely companies who you don’t compete with yet but want to. These are more established companies who you’re hoping to be compared to and start competing with. Doing competitive intel on these companies is important when you’re trying to position yourself as a challenger and beat the more established company on price. You often don’t want to price higher than these competitors if they’re very popular and established in the market since probably their brand trust is part of why they’re able to charge that premium 3. Last there are folks that are competitor-adjacent that don’t compete with you or do what your product does, but they are in a similar software category or are related in some way to what your product does. Understanding their pricing models in helpful in thinking about the industry as a whole and where your product fits.

1. The best advice I have for messaging around a price increase is to clear, concise, and customer focused. No matter why you’re changing your prices or how justifiable the price change is, a customer is not going to be excited about having to pay more. The biggest mistakes I see in pricing are when companies are too self-congratulatory in how great their product is and why it’s a no brainer to pay more and, on the flip side, companies that are too apologetic or clearly worried about customers being upset in their communication. 2. In terms of the way to create messaging, it starts with getting really clear on the “why” behind the price change internally. Once you have a really clear POV on why you’re changing yoru prices, you can figure out how to message it to customers. Of course, you’re never going to put “we’re underpriced in comparison to our competitors” in an email to customers but knowing that will let you know that you don’t need to be too apologetic in your tone because the price change you’re implementing won’t seem extreme in comparison to other options on the market. 3. From there, I recommend a few tactical things: 1. Tie your pricing to a product launch and new offernigs. That way, when you create messaging you can point to improvements that the team is making to justify why there would be a premium 2. Be extremely clear internally about the way you’ll handle complaints. If you all agree to be very lenient and generous with current customers, your messaging can be very focused on getting folks to reach out to the team if they have complaints or frustrations since you know that they will get something to help ease the pain. If you decide internally you want to hold firm on the change, then you can make sure your messaging doesn’t lead folks to believe there’s some way to get a better price if they reach out since that will just furstrate the customer and your support/customer facing teams 3. Test your messaging if you can. If you have a customer advisory board or very active community members, you can preview your price change and messaging to them. This is now standard practice for my team as a way to catch mistakes or oversights on pricing changes that we might not have noticed until we saw a customer’s reaction to the change.

1. I’ll start by saying that if you’re consistently hearing that feedback, your job as a PMM is not just to come up with messaging to handle the objection but also to make sure you’re getting to the root of the issue, really understanding that feedback, and bringing that to the larger pricing leadership group to keep a pulse on how pricing is received and, over time, decide if you need to make a change or stay the course. You’re not always there just to figure out the messaging, your insights can and should be influencing strategy. 2. Getting off my soapbox to answer the actual question. My main advice is to get out of a price conversation and into a value conversation. I think the easiest answer is to focus on the value that your tool provides to an organization. Can you get clear on the ROI that your product provides, what tangible business results and value it brings to teams who use it? And, more importantly, can you make sure that the value you’re citing solves a real world need for your buyer? If you can get that messaging put together and clear, you can use it to have a real conversation with a buyer on how much value someone can get out of using the product, and, in many cases, that helps to bring down the objection around price. I will say, this ROI messaging work needs to be really thoughtfully done, not pulled together in a few hours. It needs to stand up and be credible and sometimes requires you do to real research and business value studies to get to the answer. If you’re in a crunch where you need messaging now and don’t have time to do the full ROI work, my advice would be to create messaging that focuses on how your product solves real pain that your target customer feels and the value props that back up how your product solves those pain points. Start there and then keep building that ROI message.