AMA: Intuit Head of Product Marketing, QuickBooks Live, Morgan Joel on Pricing and Packaging

Product Marketing can have a significant impact on the pricing strategy, even when it's not owned by them or their Product counterparts. First and foremost, building strong working relationships with key stakeholders (such as Corporate Strategy, Partnerships, etc.) who may have a key role in setting pricing is critical to effectively influencing as decisions are made. Secondarily, actively asking key questions that probe on the supporting rationale for pricing construct and price points will open the door to surface key market and customer insights that either support the key pricing structure OR where change is needed. Below are key areas for where Product Marketing can play an active role in gathering and sharing necessary data and insights to influence the pricing strategy: 1. Market Research: Conduct in-depth market research (qualitative and quantitative) to understand customer needs, preferences, and willingness to pay. This data can help determine optimal pricing points for different customer segments. 2. Value Proposition: By clearly articulating the value proposition of the product and how it solves customer pain points, you can influence pricing based on the perceived value of the product to the customer and how much that value is worth. 3. Competitive Analysis: Analyze competitors' pricing strategies to ensure that the product is competitively priced, this can help identify gaps in the market where premium pricing or discount pricing could be advantageous. 4. VOC: Product Marketers can gather feedback from sales teams, customers, and other stakeholders to understand how pricing may be impacting purchasing decisions. This feedback can inform pricing adjustments as needed. 5. In Market Performance: Track customer adoption, monthly revenue, customer behavior, and customer behavior to optimize pricing strategies over time.

When determining if a product or service needs to be re-priced within your portfolio, below are some factors that I would consider: 1. Customer Value: Evaluate the perceived value of your products or services among customers. Assess how price changes may impact the value proposition of the offering and consider adjustments that enhance customer value while staying competitive. 2. Demand Elasticity: Consider the elasticity of demand for your products or services. Understand how customers will react to price changes and adjust pricing based on demand sensitivity to maximize revenue and market share. 3. Cost Structure: Review your cost structure to ensure that pricing changes are aligned with your profitability goals. Consider factors such as production costs, overhead expenses, and margins when determining new price points. 4. Market Positioning: Determine how you want to position your products or services in the market relative to competitors. Decide whether you want to be perceived as a premium offering, a low-cost option, or somewhere in between. 5. Seasonality and Trends: Take into account seasonal purchase behavior, discounts & promotions, and industry trends that may impact pricing decisions. Adjust pricing dynamically to capitalize on peak seasons or respond to changing market conditions.

Usage-based pricing (UBP) has gained popularity for several reasons. It allows for a customer to only pay for what they use, which makes it a very attractive and fair when creating an appealing price to value equation. 1. Value-Based Pricing: UBP aligns pricing with actual usage or consumption of a product or service. This pricing model is often perceived as fair because customers only pay for what they use, creating a direct correlation between value received and price paid. 2. Scalability: UBP is particularly attractive for businesses that scale their usage up or down based on demand. It allows customers to start small and only pay for what they need, as their needs grow they can move into a higher price point. 3. Transparency and Efficiency: UBP offers clear visibility into the cost implications of their actual usage, as well as incentivizes customers to being more efficient to optimize their usage to lower costs. This can lead to more responsible consumption patterns and cost savings for both customers and providers. 4. Customization and Flexibility: UBP allows for customization based on individual needs and usage patterns. Customers can choose pricing plans that best fit their usage, leading to a more tailored and flexible pricing structure. While there are many favorable reasons to move to UBP to appeal to prospective customers, there are a few things to be mindful of before deciding to make the switch. Implementing and managing usage-based pricing models can be complex, requiring new billing systems and processes to accurately track usage, charge customers accordingly. Also, it does not always lead to more favorable business outcomes. Usage-based pricing can be perceived as more complicated and less transparent than flat-rate pricing models. Customers will always evaluate your product or service based on the perceived value it provides them, through the lens of their usage. The beauty of subscription models priced based on customer complexity or needs (such as insurance) versus usage, are that customers pay a flat price no matter their consumption. In fact, you are not trying to incentivize usage on a regular basis through some other pricing models. Net, ultimately your pricing construct depends on the product or service that you provide, as well as the make-up of your target audience. Hopefully the information above provides things to consider when evaluating your pricing structure.

While there are many reasons to open up a self-service 'buy-now' channel for cost and scalability reasons, these are a few critical things to consider when determining if it's right for your business: 1. Product Complexity: Consider the complexity of your products or services. Self-serve buying channels are typically more suitable for straightforward, easily understandable products that do not require significant customization or consultation. Can your product be purchased via self-service content or compelling merchandising experiences, OR is a complex product that requires a lot of explanation? 2. Existing Channels: Evaluate how a self-serve buying channel would complement or potentially cannibalize existing sales channels. Ensure that the new channel aligns with your overall multichannel strategy and does not conflict with established sales processes. This is especially important when managing both headcount for channels that require humans to staff them (i.e. Sales or Customer Success), as well as incentivizing the channel mix that is most suitable for your business. 3. B2C vs. B2B: Direct to consumer (or SMB) products are more typically sold via self-serve channels, such as on the Web or In-Product up-sell vs. B2B products are usually higher-priced products or services that require more of a consultative sale. Understand if your target customers prefer self-service options for purchasing. Analyze customer behavior, feedback, and preferences to gauge the demand for a self-serve buying channel. While these are not the only factors, these are the first ones that I would think about before you get too far along in operationalizing a new channel.

Below are few important exercises to consider when first standing up a competitive intelligence program for pricing: 1. Identify Key Competitors: Start by identifying your main competitors in the market. Understand their positioning, target markets, and the products or services they offer that compete directly with yours. 2. Pricing Models: Analyze your competitors' pricing models. Determine whether they use flat-rate pricing, usage-based pricing, tiered pricing, or other pricing structures. * Understand the rationale behind their pricing models. * Evaluate where their pricing stands relative to one another, as well as how yours' compares. * Analyze your competitors' bundling, cross-selling, or upselling strategies. 3. Compare Features and Value: Compare the features and value proposition of your product or service with those of your competitors. Identify areas where your offering provides unique value that justifies a premium price or areas where you may need to adjust pricing to remain competitive. 4. Benchmarking: Conduct pricing benchmarking exercises to compare your prices with those of competitors. Identify areas where you may be pricing too high or too low relative to the competition. In addition to the items listed above which can be refreshed on an annual or bi-annual basis, these are some things to track more regularly when it comes to competitive pricing: 1. Pricing Changes: Regularly monitor your competitors' pricing changes. This can include tracking list prices, discounts, promotions, and any adjustments in pricing strategy over time. 2. Market Trends: Stay informed about market trends, economic conditions, industry regulations, and other external factors that may impact your competitors' pricing decisions. Understand the broader context in which pricing strategies are formulated. 3. Competitive War-Gaming: Scenario plan various changes in competitor pricing and the impacts that those would have on your business. Determine what mitigation efforts you would take to most favorably position yourself in the market and limit the downside potential. 4. Intelligence Tools: Consider using competitive intelligence tools or software that can automate the process of monitoring competitors' pricing changes, tracking market data, and providing insights into pricing trends. This can speed up the process and limit the amount of manual effort.