Charging Up Your Subscription Commerce With a 360 View (Subscribed13)
Pricing & Packaging Flexibility Drives Subscription Growth (Subscribed13)
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Pricing & Packaging Flexibility Drives Subscrip8on Growth Guy Marion Senior Director, Online & Customer Acquisi9on Jake Randall Director of Business Opera9ons
Transcript of Pricing & Packaging Flexibility Drives Subscription Growth (Subscribed13)
Pricing & Packaging Flexibility Drives Subscrip8on Growth
Guy Marion Senior Director,
Online & Customer Acquisi9on
Jake Randall Director of Business Opera9ons
The Nine Keys to Subscription Success
$
PRICE ACQUIRE BILL COLLECT
NURTURE ACCOUNT MEASURE ITERATE SCALE
Pricing & Packaging: Your New Strategic Weapon
Guy Marion Senior Director,
Online & Customer Acquisition
Agenda
• About Zendesk • How Zendesk Uses Zuora • Our Pricing Journey • Secret Pricing Weapons • Summary
Company Highlights 5
CUSTOMERS
30K+
INVESTORS
400+ EMPLOYEES FOUNDED
2007 ORIGIN
Denmark HQ
San Francisco
SAN FRANCISCO
LONDON
COPENHAGEN
MELBOURNE
DUBLIN
TOKYO MADISON
MANILA
BUENOS AIRES
OFFICES
USERS
200M+
How Zendesk Uses Zuora
Background
P L A T F O R M O V E R V I E W
Business Model
The Challenge
Zendesk: Cloud-based Customer Service and Engagement platform
B2B SaaS (multi-tenant) Direct: Self-serve and sales assisted Channels: Marketplace, Service Partners
Easily add new products/services Self-service payments, flexible billing terms Enable easy upsell/cross of the base Support for multi currency Native Salesforce integration
Zendesk Pricing Journey Plan Consolidation
Zendesk Launch (2008) Free Trial + Bundles
August 2009
Price Change May 2010
Enterprise Plan
Aug 2011
“Causeware” Feb 2012
Re-launch of Advanced Plans
September 2013
Five Pricing & Packaging Secrets
Secret #1: Start simple with a low friction offering
Causeware Freemium
Secret #2: De-risk your pricing launch by testing the waters first
Five Pricing & Packaging Secrets
Secret #3: Evolve multiple editions to drive revenue while keeping competitive
Customer Support App Development
Five Pricing & Packaging Secrets
Priced per user per month
Priced per 5 users per month
Secret #4: Build a repeatable low touch sales model to reduce CAC and focus your upstream sales efforts
Five Pricing & Packaging Secrets
Secret #5: In SaaS, 90%+ of your MRR comes from existing customers, so price and package to upsell
Five Pricing & Packaging Secrets
Summary
• Start simple with a low friction offering • Test the waters before releasing new pricing
• Multiple editions drives revenue while keeping you competitive
• Build a repeatable low-touch sales model to scale
• Price and package to upsell your customer base
Pricing and Packaging A finance and operations perspective
Jake Randall Director of Business Operations
Agenda
1. Okta Overview
2. Evolution of Okta’s Product and Packaging
3. Lessons Learned
4. QA
OKTA M a r k e t l e a d e r i n I d e n t i t y a s a S e r v i c e ( I D a a S )
Okta Pricing & Packaging Journey
Okta initially used “standard” per user per month pricing
Multi-Edition: Per User per
Month
Customers needed a scalable UoM licensing model
Experiment with term lengths / billing Maximize ARR
while ensuring customers’ success
Okta Editions M u l t i - E d i t i o n s , O n e U o M
Use UoM to Expand Market
Scale
Predictability
ROI
Create a license model/UoM that expands your market and increases value to existing Customers
Term Length and Billing Frequency
Volu
me
Bas
ed P
ricin
g
Term Length / Billing Based Discounts
1. Created negotiation/pricing that tied to improved LTV of Customer
2. Focus on how you position each “package” to Customer
3. Understand your churn, WACC, etc. to know how much discount makes sense for your business
Bundled Services M a x i m i z e A R R – M a x i m i z e C u s t o m e r S u c c e s s
Non-‐Recurring Fees Subscrip9ons
Per User
Per Login
Professional Services
Problem: − Customer has a limited budget for project − Okta wanted to maximize recurring revenue
Non-‐Recurring Fees Subscrip9ons
Per User
Per Login
“Bundled” PS
Result: − Increased avg. ARR per deal (10% - 20%) − Ensured customer received appropriate on-
boarding
Lessons Learned
Flexibility
Bundle
Listen to your customers − Create units of measurement that tie to
your customers business model Experiment with term length/pricing − Understand your churn and consider
appropriate discounts for multi-year Maximize value of every dollar − Consider packaging your one-time fees as “included” to
maximize ARR/MRR.
Extend
Lessons Learned
Flexibility
Bundle
Native ability to manage UoMs
Automate renewals, billings, etc. for different term lengths and billing cycles
Control packaging of products with “Charges” and “Rate Plans”
Extend
Q&A
Thank You!
