AMA: Twilio Director of Pricing and Packaging, Twilio Flex, Ajit Ghuman on Pricing and Packaging

The truth is most pricing problems aren't pricing problems. In fact, they are rarely pricing problems. They are just the causal impact of poorly understood and/or communicated positioning of a product leading to a lack of conviction and a whole host of downstream issues. Pricing cannot be set without the Positioning being clearly thought through.pricing is intimately connected to Positioning.  Knowing the positioning will help you answer the following questions: Is your product a 'tool/widget,' ...Read More

Your question is about: The go-to-resource to conduct B2B pricing power for a product.  There really isn't any go-to-resource, its a set of things to consider such as: 1. Brand Power: Is the product the category leader? Do customers trust the brand? In this case the brand is likely to have more pricing power than competitors.  2. Net Dollar Retention Rate: Numbers of NDR above 130 generally indicate that customers increase usage of the product and spend more with the company.  3. Discounting Rat ...Read More

Your room to maneuver depends on whether you have a fully transparent pricing model reflected on your website or if it is somewhat general on the pricing page so that your reps can customize.  If I were to guess, this is a transparent pricing page on your website. 1. Package Definition: It could be worth considering what would increase package differentiation more so that your prospects have a clear choice in front of them. To do this correctly it is important to try to reduce the overlap betwee ...Read More

This is a good question. Multiple products, sold successfully together can take a company from good to great. You now have multiple revenue streams and a chance to increase the total spend your customers make with you. Leading to high growth rates and NDR (net dollar retention) rates.  From a pricing standpoint, it is important to think about these products both individually and together.  What do I mean by that? All products will have to be priced on their own merits, based on the buyers and us ...Read More

Even when you may be servinf different markets or segment with the same type of buyer. The needs of these segments are going to vary.  A VP of Ecommerce at a D2C 200 person startup is solving for inherently different needs than a VP of Ecommerce at Nike.  The D2C startup has a smaller budget and many SMB/Mid-market competitors to choose from. The MNC can pay a lot more and its likely that it is considering only a handful of vendors to solve its problem. The startup requires agility, perhaps an a ...Read More

Hi There,  When I was in your position trying to get my mind around Pricing, I faced the same challenge.  I do not think there is a decent course on software pricing out today - they are either too theoretical or too much about analytics models.  I do however refer to Tom Tunguz's blogs and articles for his simplicity and clarity on the topic of pricing.  You might want to read my book on the topic, linked here . Finally, if I get enough interest/demand I might run a course myself in the next qu ...Read More

Congrats and Godspeed!  Rolling out a new pricing model is exciting, and often is done with the future of your company in mind. New markets, new buyers, a lot of fun! But existing customers are your present and your past. Be careful about rolling out the same changes to your existing customers. Treat existing customers as special. The following is an excerpt from my book, Price To Scale. "Often applying the same rules to existing customers as new customers can result in difficult expansion and r ...Read More

It's become a trend today to publish pricing pages, 75% of companies do. But this is by no means a virtue. The following is an excerpt from my book, Price To Scale. "When you have a large market with a high degree of homogeneity, it is feasible to emulate other SaaS companies and publish the complete pricing structure online (replete with packages and prices) to help you scale your sales engine and maximum value from the market. On the other hand, if your market size is limited (say Fortune 100 ...Read More

There are a couple of questions here. Let me address the question of single vs bundled solutions.  Why do sell something standalone vs in a bundle?  Its about the right offering , for the right buyer/market segment. These offers are the right combination of feature-sets, services, and price for a market segment that will ensure that you can derive the maximum possible value from within that segment. The goal of establishing a pricing model is to standardize 'packages/offerings' that allow your f ...Read More

In my experience, most Sales teams think the pricing is too high, and often they have the data to back it up with win/loss calls suggesting price as the reason a customer did not buy a solution. But sometimes these may be customers that fall outside your ICP. At other times, they may just need more ROI justification to make the case for your product internally. Often this is excacerbated by the quota they carry and a short-term focus on closing deals in the near-term.  On the other hand, many ex ...Read More