I'm looking at a potential pricing + packaging re-vamp. I've identified the problems + opportunities and would love insight in thinking about whether to run in-house or hire a consultant. If a consultant, whom else have people worked with aside from ProfitWell and Simon Kucher? Ideally want to learn along with the project

Question

Nate Franklin · Accepted Answer

I've found that running a price / packaging revamp in-house versus with a consultant depends on three factors:

1. Assigning a DRI to lead the project and having a clear decision matrix

2. Ability to run a pricing study & impact analysis

3. Scope of risk of the change / ability to run pricing as a test

Ultimately, this is a judgement call - but clearly if you are not feeling confident in any of the above - you should take a hard look at whether or not it is right time to do this project. Here's my breakdown / thinking across these three factors:

Assigning a DRI & Clear Decision Matrix

This is the most important factor of any pricing / packaging update. This decision CANNOT be done by a committee - it will not work. Believe me, I have tried it. You can have an advisory or steering committee -- but there has to be a clear owner and clear decision matrix. Decision matrix (depending on company size) PMM Proposal --> CRO + CPO --> CFO --> CEO. A reason to go with an outside consultant would be to assist the DRI with getting the work done (research, analysis, proposal and project mgmt). Either way, you still need a DRI (should be PMM!) and a decision matrix.

Ability to run a pricing study & impact analysis

This is about assessing you and your organization's ability to do the proper analysis and research to run a pricing / packaging project. Do you have experience with pricing & packaging in the past? Do you have an analyst who can help model out best case and worst case scenarios with potential options? If one or both of those is a no, then unless have a relatively risk-free way to test a new pricing / packaging strategy, you should find outside help (or hire someone!).

Scope of risk / ability to run a test

The size of the change you are considering and your ability to test that out in a "safe" can help you decide if you need to look outside for help. If you're making a smaller change (say on an add-on product) or if you able to siphon off a percentage of customers to test on then running it internally makes a lot of sense. If you are concerned about your organizations experience, analytic skills and you are look at a major, going outside will help you de-risk the project. Even if you end up going with a plan you had been thinking about all along.

Chris Mills · Answer

I've done pricing & packaging projects both in-house with the support of external consulting help. If you or others in your org have never done a big pricing & packaging project before it might be worthwhile to bring in external help. I've worked with Simon Kucher in the past and they have a ton of pricing strategy expertise across a variety of industries. In our latest P&P project, we ran it internally but involved advisors from our investors, industry analysts we work with and our customer advisory board. Depending on who your investors are they may have pricing & packaging expertise in-house. For example, one of our VC's has a pricing expert (former Simon-Kucher consultant) that advises portoflio companies. We included him as part of our research and validation of our recommendation.

Yannick Kpodar · Answer

In-house will usually be a great learning experience. You can run this project if you operate as a unit and work with your cross-functional partners. Consultants can add a ton of value, but they come at a steep cost. We decided that we could do it on our own, and we were right :)

But I recommend talking to as many pricing folks in your industry or other industries to learn from them. Some mistakes are avoidable. The only consulting firm we spoke with was Simon Kucher.

Have a look at these slides. It can already help steer you in the right direction. Don't hesitate to reach out to me if you need it.

Related Ask Me Anything Sessions

Square Head of Product Marketing, Square Staff, Amy Loh on Pricing and Packaging

Amplitude Director, Product Marketing, Nate Franklin on Pricing and Packaging

Demandbase VP Product and Industry Marketing, Jackie Palmeron Pricing and Packaging

Related Questions