43. Is usage-based pricing the answer?
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Description
In this episode, we discuss usage-based pricing, seat pricing, maximising margin and customer expansion. We are joined by Mark Stiving, Founder of Impact Pricing. We chat about:  What exactly is usage-based pricing?How do we correlate pricing metrics with how customers are using the product?What are the criteria and considerations when choosing the value metric?How do you choose between true usage-based pricing and tiered usage-based pricing?How do we work around the pricing mechanisms that our clients or vendors are giving us?Is there more of a move towards straight usage or is tiered pricing here to stay?How do we expand our customers?Who should be responsible for pricing and packaging within the company?  References: Mark on LinkedIN Mark’s podcast, Impact Pricing Biography:  Mark Stiving, Pricing Educator, Coach, Podcast Host & 2x Author. He has driven business initiatives worth hundreds of millions of dollars. He is sought after for his superpower of finding invincible profits in every company he works with. He is an award-winning international speaker known for helping audiences find hidden value and more profit, immediately. Mark started and successfully sold three powerful companies in the tech sector. His forthcoming book is "Invincible Profits: How to Lead a Value Revolution and Dominate Your Market" To learn more about Beth and Brandon or to find out about sponsorship opportunities click here.  Summary: Usage-based pricing with a focus on personalization and avoiding seat-based pricing. 0:05Bethany shares her recent haircut experience with Brandon, including the surprise of finding a large amount of hair after cutting it.Brandon discusses usage-based pricing, highlighting its potential cleverness and limitations.Pricing strategies for SaaS companies, including usage-based pricing and subscription packages. 4:02Brandon: Value metric should be clear, easy to understand, and tie to usage (e.g., transcription files, contacts in HubSpot)Brandon: Finding a single value metric to scale can be challenging, as customers may not understand usage outside of vendor-supplied calculatorsBrandon discusses challenges in customer success with usage-based pricing, including unhappy customers who want to downgrade and the potential for unused value.Bethany and Brandon discuss the importance of commissioning based on usage and actual money being seen, with a...
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