Bryan Belanger is the senior director of Technology Business Research. He’s also the senior director at XaaS Pricing, a subsidiary of TBR that helps SaaS companies price on a data-driven approach.
In this episode, Bryan talks about the work that XaaS Pricing does and who their target customers are. He also shares his insights on other business and pricing models and how you could choose which one works best for your business.
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Why you have to check out today’s podcast:
- Find out who XaaS Pricing are and how they might be able to help with your business
- Learn how to create a simple yet effective business framework by talking to your customers
- Get insights on the current trends such as usage-based pricing and product-led growth
“Create a simple framework that works for you. For me, it’s probably talk to ten customers; and that, I think, can help you. I think the hardest part is often knowing where to start or what you’re even trying to solve for is. So, find a framework that works for you, that focuses on talking to your customers and asking these questions, and let it snowball from there.”
– Bryan Belanger
Topics Covered:
01:51 – How Bryan got into pricing
02:56 – How XaaS started
03:40 – What XaaS Pricing actually does, and who their target customers are
05:00 – Why you’d want XaaS Pricing’s products if you’re a medium-sized company
09:41 – XaaS Pricing’s vision: Systematize the Van Westendorp model
13:46 – Why people in B2B and SaaS businesses are not focusing at their competitors’ prices
15:41 – How XaaS deals with pricing for new customers vs pricing for existing customers
17:34 – Bryan’s thoughts on usage-based pricing
19:38 – Usage-based pricing works for some companies, but not for everyone
21:54 – Bryan’s thoughts on product-led growth
25:17 – Does XaaS Pricing use the product-led growth business model?
26:17 – Bryan’s pricing advice
27:32 – Connect with Bryan Belanger
Key Takeaways:
“I think there’s a lot of great tools that if you know what to input, you can build, manage, measure, communicate economic value. But I think the gap is in actually finding the parts of the formula to input into those tools.” – Bryan Belanger
“Just building that muscle of talking to customers and understanding them. That’s how I learned, it’s just doing hundreds and hundreds of interviews and surveys. And I think the same applies within companies.” – Bryan Belanger
“I think the instances of true usage-based pricing are still edge cases, and most are just thinking about usage as a way to fence in package offerings more so than they are actually pricing based on usage.” – Bryan Belanger
“It’s [product-led growth] not going to work for everybody… If it doesn’t work for your customers, it really comes down to who you’re targeting, what they value, how you engage with them, all those things. And so, I think like anything else, take it for the secular trend it is. Watch it, understand, learn, but don’t jump in and try and change everything just because it’s what worked for the people that it worked for.” – Bryan Belanger
People / Resources Mentioned:
- XaaS Pricing: https://www.xaaspricing.com/
- OpenView: https://openviewpartners.com/
- Peer Signal: https://peersignal.org/
- Snowflake: https://www.snowflake.com/en/
- Win Keep Grow: How to Price and Package to Accelerate Your Subscription Business: https://www.amazon.com/Win-Keep-Grow-Accelerate-Subscription/dp/1631954784
Connect with Bryan Belanger:
- LinkedIn: https://www.linkedin.com/in/bryan-belanger/
- Email: [email protected]
Connect with Mark Stiving:
- LinkedIn: https://www.linkedin.com/in/stiving/
- Email: [email protected]
Full Interview Transcript
(Note: This transcript was created with an AI transcription service. Please forgive any transcription or grammatical errors. We probably sounded better in real life.)
Bryan Belanger
Create a simple framework that works for you. For me, it’s probably talk to ten customers; and that, I think, can help you. I think the hardest part is often knowing where to start or what you’re even trying to solve for is. So, find a framework that works for you, that focuses on talking to your customers and asking these questions, and let it snowball from there.
Mark Stiving
Today’s podcast is sponsored by Jennings Executive Search. I had a great conversation with John Jennings about the skills needed in different pricing roles. He and I think a lot alike. If you’re looking for a new pricing role, or if you’re trying to hire just the right pricing person, I strongly suggest you reach out to Jennings Executive Search. They specialize in placing pricing people. Say that three times fast.
Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the data-driven relationship between them. I’m Mark Stiving, and our guest today is Bryan Belanger. And here are three things you’d want to know about Bryan before we start. He is the senior director of Technology Business Research. He’s also the senior director at XaaS Pricing. I assume they’re pronounced as “SaaS” or something. We’ll find out. And believe it or not, he is the first person ever to use a sippy cup. And I’m not going to tell you why. Welcome, Bryan.
Bryan Belanger
Thanks, Mark. And we could probably spend the whole podcast talking about the why and how of the sippy cup. But I know we’ve got other fish to fry.
Mark Stiving
Exactly. Okay, really quickly: his dad invented it. Now we move on.
So, how did you get into pricing?
Bryan Belanger
I started at, as you mentioned, TBR back in 2010. I actually started as an intern. TBR is like a Gartner, IDC, Forrester competitor, much more boutique in focus. But I started as a research analyst doing subscription reports and the professional services practice, IT professional services and consulting. There, we started to see a volume of work related to pricing in that area. So, I started doing it around a lot of competitive intelligence studies on pricing, but true kind of pricing consulting work as well around rate card analysis and I.T, professional services. It brought in from there into its own competency within TBR, which it remains today. And then we took one step further and said “Let’s launch a side hustle company out of TBR focused more on XaaS, as you rightly pronounce, starting at the end of ‘21”.
Mark Stiving
So, XaaS is a subsidiary of TBR then?
Bryan Belanger
It is. It’s a DBA entity out of TBR that focus purely in pricing. So, our work at TBR in pricing spans everything from the pricing advisory and research engagements on the price of laying fiber lines for telecom, all the way to true SaaS consulting. So, XaaS is our effort to say all the markets we cover, of which there are about ten, mostly focused on B2B technology. They’re moving in the direction of as a service. So, this is our effort to create a research platform that’s in a consulting platform and a product behind it that’s dedicated to that specifically.
Mark Stiving
Nice. And so, what does XaaS Pricing actually do?
Bryan Belanger
That’s something I think we’re still trying to figure out. But at its core, our hope, our goal primarily is to create a product or a product-enabled service that helps not only big companies with budget dollars to throw at their pricing efforts, but SaaS companies of all sizes from start-ups onward to address their pricing challenges through, as you said, a data-driven approach. Figuring out basically through technology and through what’s really the root of XaaS as a SaaS product. Today, it’s kind of a database. We have visions to evolve it that take methodologies that are typically delivered through consulting engagements can be expensive and timely, and figure out how to scale them down so everyone can implement pricing using those data-driven approaches through the products. We do offer services on top of it, like yourself and others would provide. But the goal is to productize pricing consulting as holistically as we can.
Mark Stiving
And so, I assume you’re trying to sell this to smaller companies than the enterprise, right? So, let’s call them mid-sized companies for the sake of argument.
Bryan Belanger
Yep, mid-size and hopefully in time, lower.
Mark Stiving
Let’s pretend that I’m running a mid-sized company. Why do I want XaaS? What? Why do I want this product?
Bryan Belanger
I think the problems we’ve seen with – and don’t get me wrong, we continue to do a lot of pricing advisory work and do successfully – but I think there’s a couple of big issues, and this could even be a conversation of the research industry more broadly, but I think the budget available to throw at pricing, the timeliness of insight, I think, and the pace at which things change, I think we see a lot of companies, particularly some of our companies, for example, are say, storage vendors that you know the names of, and they’re trying to move to “as a service” offerings for their storage or their servers. And they can invest large amounts of time and dollars toward that effort because it impacts a billion-dollar plus workflow. And there are smaller companies that just can’t do that, but we think can benefit from the same methodologies. And we often find too, that when we do a study with one of those companies, by the time we deliver it, some things change in their business. They’ve reorganized, they’ve restructured the champion of the pricing efforts, moved to a new role, and so it’s already outdated and doesn’t have impacts. So, we say for those big companies and on downward: If you can deliver something like consulting insight through a product or through a combination of products or product + service, can you do it more quickly, effectively, and cost-effectively to help companies actually make use of it and make decisions off of it in a more continuous fashion?
Mark Stiving
Get specific with me, if you don’t mind, and if it’s okay. I’d really like to know, what is a specific problem, a specific KPI, a specific something, that you can do for a company so that I can get my arms around what it is that we’re actually doing.
Bryan Belanger
Today, it’s pretty limited and we’re – I think as we, and this is the whole track, we could go down around my learnings of building the SaaS product about pricing SaaS products. Today, there’s a chunk of the work we do, certainly if it’s a competitive study, but also if it’s doing your competitive alternatives piece of your economic value equation where you have to look at alternatives. And so, the product today addresses really that stage. So, we capture metrics on over 20,000 companies across what’s their pricing model, price level, different packages, what ISPs they serve.
So, the idea is to, at least today, if you’re going out to say 5 to 10 competitive alternatives, as you start to price a product, you can do that in our tool with the data that’s already there and it’s updated regularly. Or another use case would be just tracking your category more broadly on an ongoing basis and identifying competitive changes for research purposes or for positioning purposes.
Mark Stiving
Got it. That was brilliant. Thank you.
So, in my mind I was thinking KPIs like lifetime value or LTV/CAC, you know, things that we would always manage in the subscription business. But what you’re doing is way beyond that, where you’re actually saying, “Look, I’m going to go out and gather market data that you probably want to know as you’re making these decisions.” So, it’s market data about your competition and what they’re doing. I think that’s awesome.
Bryan Belanger
Yeah, it’s very competition and market focused. I think a blind spot for us that we’re starting to think about is incorporation of customer data into that. Obviously, I think for us customer data where you’re doing interviews, or doing a Van Westendorp, or whatever methodology or combination of methodologies you are using, you have to do that some way, but also being able to embed that tracking over time. I know everyone has their tools for it, but having a standard way to do it, a standard way to even potentially provision interviews or a survey out of a platform and incorporate that with the competitor and market data is something that’s the next thing to crack. But it is very focused on market data to use a broad term versus something like a subscription analytics or another tool that would get you LTV/CAC or other metrics.
Mark Stiving
Nice. So, most of us in pricing use Van Westendorp and are not fans of Van Westendorp. It’s pretty fascinating. I would guess, if you’re going to do great competitive customer data, if you could somehow implement conjoint, that could be super powerful. Obviously, you’d do that for a fee for your clients, but that could be super powerful for what it is you’re trying to get accomplished.
Bryan Belanger
Yeah, I think so too. I think I share the feelings on Van Westendorp. I think one thing we’re even potentially starting with; we find it potentially because as I mentioned, we’re trying to think about what’s the MVP for this for mid-size or smaller and how do you make that both cost-effective for them and scalable. And I think we’ve found like we’re doing a project right now, where just even doing qualitative interviews with 10 or 15 of their customers in a structured way and asking the right questions about value and pricing hasn’t been done. And if a tool could help structure, manage, incentivize the customer to do that, whether it’s working with us or having a champion to do that on their own, like even something like that is a place to start, I think, especially when you get down, down the market.
Mark Stiving
If you find a way to systematize that, I would love to see it. One of the things that every company I deal with, and I guess I’m not exaggerating when I say that they don’t really understand how their customers value their products. It’s a standard problem that companies have. And every time I work with a company, I don’t have the standard, “Oh, here’s how we go find that”. It’s a conversation. It’ “let’s dig deeply to go figure that out.” And so, if you can find a way to standardize that, that would be awesome. I’d love to know what it is.
Bryan Belanger
Yeah, I think that’s what we’re after. Like, we’re doing a project right now. We’re doing interviews. We ask about “How do you define, measure, manage, and track value?” And it’s kind of blank stares. And so, I think part of at least what we’ve seen in the past is if you’re not even continuously engaging with customers in that way, and asking those questions like the company is not even thinking about doing that. Part of it is A) How do you just create a platform that makes it as easy as possible for someone who’s not a pricing researcher and consultant to start collecting that data? And then I could envision, “How do you add on top of that formulas, tools that can extract the insight from that and help them get closer to ask this question to pursue value?” You see where I’m going in terms of adding an insight layer on top of it.
I think there’s a lot of great tools that if you know what to input, you can build, manage, measure, communicate economic value. But I think the gap is in actually finding the parts of the formula to input into those tools.
Mark Stiving
Yes. And I think the biggest issue is that we – I say we as in our customers – but we don’t understand our customers’ decisions well enough to be able to say, “Here’s where they’re getting economic value.” And one of these days we’ll get there, one of these days we’ll figure it out.
Bryan Belanger
Yeah, I think I agree. And I think that just the more they’ll use this project that is top of my mind, because we’re delivering a good chunk of it tomorrow. But just building that muscle of talking to customers and understanding them. That’s how I learned, it’s just doing hundreds and hundreds of interviews and surveys. And I think the same applies within companies. And so, how do you create tools and assets to help that process?
Mark Stiving
Let’s talk about competition for just a second, because I find this pretty fascinating. In the retail world, it is relatively common for one manufacturer to track prices of their competitors. They can do this with web scraping, they can do this with reports. And so, they’re watching competitive price moves constantly. When we get to B2B and especially when we get into SaaS, I get the feeling that people aren’t looking at their competitors’ prices. And well, I’ll just pause at that and let you pontificate and then I’ll bring up something else if it’s appropriate.
Bryan Belanger
I think what we see B2B tech broadly, I think I’ll call it legacy or established industries. Like I mentioned, we serve professional services, consultancy. We do a lot of pricing work in telecom. I think there’s a deep focus and probably methodology-wise, it’s largely competitive-driven. I think the mechanisms through which they collect data are – “There was a project, we figured out what we need to know for the next three years and then we’ll come back to it in another three years and do it again”. And in between, what kind of reset prices? And then it’s negotiating large enterprise contracts.
In B2B SaaS, I think you’re right. I think one of the learnings of launching and getting this product out there is that competitive and market data is interesting. We do a quarterly series with a group called Peer Signal, just looking at like PLG pricing and people are really interested and engaged on “What are good examples in my space, what’s the overall?” But I think when it gets down to like the nuts and bolts of setting pricing, is there even a competitive intelligence team? I think it’s much less varied and more of what you’re saying, I think.
Mark Stiving
Yeah. And when I think about SaaS pricing, especially if you’re going to add competition into the story, I think there’s a huge difference between existing customers and new customers, right? New customers are deciding between your product and a competitor’s product. Now, competitive pricing is super important. Existing customers are saying, “Am I going to stay, or am I going to upgrade or buy more from you?” And in those cases, I don’t think competition plays as big a role at all. And so, do you guys deal with that at all?
Bryan Belanger
Yeah, we definitely do. I think this is one thing I come back to. There’s so many different problem entry points and project entry points in pricing. And if the issue is we’re not attracting enough new customers and pricing is an issue, then I think it tends to tip us much more toward “Is there a competitive situation where it’s like if we’re not achieving upsell, there’s retention?” I think it’s much more like we spend much less time on the competition. And I think it’s also dependent on where the company is. I think if they’re starting from scratch, open canvas, what do we do with pricing? We see a lot like we looked at competitors in the space or proxies who do what we do and started there. Or if it’s someone who’s been in market, it’s much more like the project we’re doing now. They’ve been in the market I think ten years or a little longer. And you look at five competitors and they all use a completely different and not even comparable model, much less look at the price level.
So, it’s part of it, but it’s way less of a part of it than in a newer company. The problem is related to a certain type of customer for sure.
Mark Stiving
And when companies are just starting out in the SaaS world, winning customers is the only thing that matters. And keeping it matters too. But winning is really important at that point.
And so, one of the things that we hear a lot about is usage-based pricing. And there are all these different pricing models that come out nowadays. I’ll just pause. What are your thoughts on usage-based pricing? How does that fit into what you guys are doing?
Bryan Belanger
I think I did a presentation all about usage-based pricing at RevOps2 Metrics Palooza and I think we haven’t seen much change or opinion. I think anyone can look at big macro picture, the stuff OpenView is putting out, others are putting out, and say “It’s the general trajectory of the industry and it works really well for the case studies where we hear about how much they’re growing and activating users and their net dollar retention”. I think, and our data reflects – and this it’s been a focus area of our benchmark – is most of the industry is better served and just purely by the data actually approaching it much more with a middle ground model where things still look like subscription, but you’re introducing usage and to being more intentional about how you introduce usage limits into packaging, how you tier the product out.
And so, I think directional trend of the industry, it’s hard to ignore what you see in the survey data from OpenView and others. But I think, it’s like anything – the nuance gets a little bit lost if you don’t break it down into exactly what we’re talking about. And I think the instances of true usage-based pricing are still edge cases, and most are just thinking about usage as a way to fence in package offerings more so than they are actually pricing based on usage.
Mark Stiving
Yeah, I think that’s a brilliant answer, by the way. And the part that I like the best, and I hadn’t stopped to think about this, is usage-based pricing works really well for the companies where they show us that usage-based pricing worked really well.
Bryan Belanger
Right.
Mark Stiving
And it doesn’t mean that it works really well everywhere. And I think we have this tendency in business and in pricing to say, “Oh, here’s the new trend, let’s all go run that way.” And yeah, that’s a great trend for some companies. But it doesn’t fit everyone.
Bryan Belanger
I think it’s easy if where you focus is saying “We should think about how our product is used and align that to our consideration of value and by extension pricing”, I think that’s a good thing. I think to say, “Oh no, we’re pricing based on seats and seats is bad and therefore we need a usage model.” I think it’s the knee jerk that we’re trying to at least say like, “No, look at the data.” We have a study coming out tomorrow with Peer Signal, looking at product-led growth companies’ pricing models. And the data shows that I think 80% have some variant of a seat-based model or they’re not – point being, it’s just not as usage-based as the flashy case studies like Snowflake or whatever else would tell you.
Mark Stiving
And if you think about it, if you really go pure usage-based, it’s no longer a subscription.
Bryan Belanger
Right. We’re working with a company now who started as true outcome-based kind of a payments and taking on percentage of transaction model and they’re actually going the other way. They were thinking about going the other right because of the benefits of subscription. So yes, I think that’s why everyone lands in the middle ground of set-usage caps on our plans. But it’s still a subscription. There’s still some type of commitment. It’s because they are in the middle ground and it makes more sense than jumping into usage-based.
Mark Stiving
Nice. Well, you brought up the phrase “product-led growth”, and that’s another one of those that I hear a lot. It’s like “This is the new business strategy. We all have to go do product-led growth”. And I think we’re back to the same issue that says, “For some companies, that makes a ton of sense”. What are you finding and what do you think about product led growth?
Bryan Belanger
Yeah, I think the same. I like to defer to data. I’m a research analyst by trade, so I think the Peer Signal team overall, their data would suggest that exactly what you said: It works really, really well for some, for most it’s “How do you take the piece parts of this strategy and introduce them into a hybrid model that works best?” I think from a pricing perspective, the same is true if you look at OpenView’s tenants of product-led growth from a monetization perspective, it’s “monetize based on usage, monetize after delivering value”. And those are good tenants to keep in mind. But like we were just talking about, it’s not going to work for everybody. It doesn’t mean you need to rush out and offer a free or freemium approach. If it doesn’t work for your customers, it really comes down to who you’re targeting, what they value, how you engage with them, all those things. And so, I think like anything else, take it for the secular trend it is. Watch it, understand, learn, but don’t jump in and try and change everything just because it’s what worked for the people that it worked for as you said.
Mark Stiving
The thing that I love about product led growth is, imagine a company that that was built on a sales organization. So, they’re sales-led growth, it’s not really product-lead. If they start thinking about product-led growth, it is going to tend to make their product better. It’s going to tend to make it easier for customers to get the value faster, to perceive value. And so, I think it makes sales easier and may reduce some of their sales cost. But it’s really “Can you just think about how do you make your product better for your customers?” And that’s probably driving a lot of product-led growth.
Bryan Belanger
Just to use an example from our backyard, research has traditionally been a very sales and enterprise-driven approach and that’s how ours is. I think if anyone has talked to a Gartner rep, they know that.
But I think if you think about product-led growth and what it means, it it’s what you said; it’s how you make it better. But also, for us, it’s been how do we open up our product to different purchasing avenues and different customers based on what we’re learning? So, for example, do we need to sell at an enterprise level so they get enterprise access to our research? Or can we sell like Ben Thompson with Stratechery and sell $3 million worth of newsletters, doing what industry analysts do for 12 bucks a month? Like, is there a way to package that way to the prosumer?
So, I think I agree that it forces you to think about your product in the right vehicles to get to the right customers in a more effective way through your product.
Mark Stiving
And do you think of your XaaS Pricing product as product-led growth for your consulting business?
Bryan Belanger
That’s how I think where we’ve seen successes. It’s using it as that. And I’ve seen it even in our industry, there’s companies like Stigg, Arcana, or others who sell pricing infrastructure products and tools, which is something I would boggle my mind to even figure out. But they’re doing the same thing. They’re launching pricing indices or other research-based tools that bring customers in or users in. And then there’s a need for, “Oh, we do want to change our pricing, we need the pricing page infrastructure to do it.” For us, I think it’s similar. It’s a platform for insights and research and delivering value that way. And then naturally, there’s an opportunity to say, “This is great data, but I need to make sense of it. For me, it’s you guys. Can you help services to do that?”
Mark Stiving
Nice. Perfect. Hey, Bryan, we are wrapping up, so I’ve got to ask you the final question, if that’s okay. What is one piece of pricing advice you’d give our listeners that you think could have a big impact on their business?
Bryan Belanger
I think we kind of talked about it, but I’ve always gotten the most value out of – I’ll actually steal it from Marcos Rivera, who’s a notable consultant in our world, and his version of it is the five four, three, two, one framework. I think there’s a lot of paralysis on getting started. What do we do? How do we approach it? His five, four, three, two, one, it’s basically talk to five customers. I’m going to forget exactly what it is, but talk to five customers, talk to three reps, look at two years of sales data – I can’t figure out what one is. And I may be getting it wrong. But basically, create a simple framework that works for you. For me, it’s probably talk to ten customers; and that, I think, can help you. I think the hardest part is often knowing where to start or what you’re even trying to solve for is. So, find a framework that works for you, that focuses on talking to your customers and asking these questions, and let it snowball from there.
Mark Stiving
Nice. We can never go wrong talking to our customers and learning how they value our products. Never.
Bryan, thank you so much for your time today. If anybody wants to contact you, how can they do that?
Bryan Belanger
Yeah, LinkedIn, fairly active on there as much as I can, as I am not great at social media. But you can find me there, on Twitter as well, just under my name or shoot me an email at [email protected]. We can connect there.
Mark Stiving
And to our listeners thank you so much for your time. If you enjoyed this, would you please leave us a rating and a review? I cannot believe how hard it is to figure out how to leave a review on a podcast. So, we’ve signed up for ratethispodcast.com/impactpricing. They will give you instructions on how to get to whatever version you’re using. And although I don’t have a new podcast review, I do have a new book review, I’d like to share with you from T.W. Move. He wrote:
“Excellent resource subscription pricing best practices. Some business books I read get stacked away or donated. For a few others, I had posted no tabs and write up my own CliffsNotes version. Win, Keep, Grow definitely goes into my latter category with practical and straightforward frameworks, KPIs, and examples of best practices. Some people think of subscription simply as a pricing method, but Professor Stiving deconstructs the subscription business model and advises on how to find the right levers to optimize customer lifetime value. I highly recommend it.”
Thank you, T.W.
And when I was looking this up, I noticed that Win, Keep, Grow is only $2.99 on Kindle right now, and I want to know who sets the pricing for that. So, go get a copy of that book if you don’t have one yet.
And finally, if you have any questions or comments about this podcast or pricing in general, feel free to email me at mailto:[email protected]. Now, go make an impact.
Thanks again to Jennings Executive Search for sponsoring our podcast. If you’re looking to hire someone in pricing, I suggest you contact someone who knows pricing people contact Jennings Executive Search.
Tags: Accelerate Your Subscription Business, ask a pricing expert, pricing metrics, pricing strategy
