AMA: Intercom Head of Monetization & Pricing Strategy, Jonathan Brandon on Pricing and Packaging

Pricing is tough, and it's also never done. That being said, making incremental changes too often without understanding the impact of the previous change is the achilles heel of monetization.  You will never "know" pre-launch that you have the right price. There are a lot of things you can do to increase the probability that you are in the ballpark though. Inputs are going to vary based on your industry and business model and selling motion, but will almost always include some kind of internal p ...Read More

The big one....where to start?! Creating your company's first well-researched pricing model is quite different than making a big change later on, but I'd say some of the same advice holds: Alignment is CRITICAL! Any change in your pricing, especially in SaaS, absolutely must involve every team within your organization. And as much as it may sting, customer-facing teams (sales, support, success, etc) need to have a very prominent role. Alignment comes from creating a team of cross-functional stak ...Read More

Assuming you have a clear strategy, it always comes down to understanding your ideal, target customers. When going from a single product to multiple, you need to figure out who it's for, what drives value, and how you plan to charge. We have a set of richly detailed buyer personas at Intercom that connects segmentation, value drivers, product needs, and willingness-to-pay. To develop packages, you start with a hypothesis: create hypothetical packages, price points, and buying motions (self-serve ...Read More

The transition to PMM leading pricing occured before I joined, and led to my hire (yay!) At Intercom, pricing had been a shared responsibility without a clear owner for quite a while. It was a collaboration between product, finance, bizops, and sales. While the collaboration model remains, having PMM lead the effort (and having a clear driver and DACI) has been hugely beneficial.The biggest reason is that PMM sits at the intersection of Product and GTM (Sales and Marketing) and is thus ideally p ...Read More

If you're lowering your price, you might have bigger problem than how to communicate the change. This sounds like a more fundamental product strategy, positioning, and segmentation question than it is about pricing. In general, communicating price changes (higher or lower) and determining eligibility isn't the job of the pricing function. It's pricing's job to make a recommendation that supports the company's strategy and helps hit financial targets. Ultimately, it will be up to customer-facing ...Read More

At Intercom we believe in value-based pricing, which means we price primarily, but not exclusively, according to the perceived value of our proudct to our target buyers. Competition is an important input, but unless you are selling a fully commoditized product for which many identical alternatives exist (ie. toothpaste), it shouldn't be the primary driver of your pricing. I could hold up two identical black rectangles labeled "smartphone" and put $999 on one and $599 on the other, then ask you " ...Read More

They are absolutely linked, and I'd argue that positioning drives both pricing and packaging What features are needed by which buyer personas? What do you call them? How do you describe plans? How do you convey that it's super valueable? What are customers anchoring on? That's all positioning. Your pricing page and structure should map to how your marketing and sales team are talking about and positioning the value of your product.Pricing is the exchange rate on that value you're providing, as P ...Read More

Me too! I was, uh, lucky enough to study Economics in college then spend 15 years in the financial services industry. This gave me a really solid background in research and quantitative analysis. While I haven't taken it, I have heard excellent things about the Reforge Monetization + Pricing course. Many things can be learned outside of class. Here's a super condensed list of reading material I highly recommend. They're not all directly related to pricing & packaging, but have informed how I ...Read More

Check out my answer to question "What have been your key learnings from any "Pricing/Re-pricing launch" that you have led/seen within your company?"But it's worth repeating: involve them early and often, and build trust! This means more than occaisional pop-ins and surveys. It means building relationships with your sales org at ever level. Get to know some reps. Sit in on sales calls. Read closed won/lost reports. Figure out how they are compensated. Have regular check-ins with leadership to val ...Read More