Patrick Campbell: Pricing is much more than just a number
Patrick Campbell is probably one of the best SaaS pricing gurus out there and a long term Startup Wise Guys mentor, dedicated enough to cross the ocean for us twice a year. Fascination with “subscription truth” as he himself puts it has pushed his company ProfitWell and kept driving them forward. When Patrick came to Tallinn to mentor our CyberNorth startups we caught him for “5 Wise Minutes” chat to pick his brain about SaaS pricing tips & tricks, biggest mistakes to avoid and differences between European and American markets.
Customer, value metrics and process
When it comes to pricing, startups often start thinking from “the number”. However, there are 3 far more important elements at play in SaaS pricing and those are: customer, value metric and process.
Before any number that you’ll set as your price, you need to know who is your customer. That will help you determine your target market and the best positioning. Don’t just jump over this step.
All these little details about – should I end my prices at nines or zeros, or should I put my most expensive tier on left hand side of the page? None of that stuff matters, if you don’t know who that customer is!
The second more tactical thing is value metric. How are you going to charge? Per user? Per hundred visits? The data shows that nailing the value metric will help you survive even when the number is wrong.
Last but not least – process! Spending all your time on product development or driving people to the conversion point but paying no attention to conversion itself is a lost opportunity. Dedicate a little bit more time for process revision and save time in your calendar in advance for this. The biggest gains can be seen with companies who make some sort of adjustment every six months.
Take into account cultural differences
All of the above mentioned things will differ when going to another market. In Patrick’s point of view the Baltics and Nordics are also different from Western Europe and of course from the US. While the tech is always really good in this region, it’s the selling and marketing which is lagging behind. Patrick’s advice: start seeking out some really good go-to-market people or really good growth people. As today a lot of things can be done remotely, maybe even look for a co-founder in Western Europe or US to complement these particular skills and understanding of local mentality that you might be missing.
For more wise thoughts and deep dive into the pricing world tune in to the video with Patrick.