Ep.20: Kyle Poyar –  Mastering SaaS Pricing: How to Price and Package Your Service

Kyle Poyar is the Vice President for Market Strategy at OpenView since 2016.  He is responsible for helping OpenView’s portfolio companies accelerate top-line growth through deep insights.  He leads segmentation, positioning, channel/partner strategy, new market entryand packaging/pricing initiatives, partnering closely with portfolio leadership teams. He also covers OpenView’s SaaS metrics and benchmarking research.   

Previously, he worked for Simon-Kucher & Partners as a Pricing Consultant for six years.  Kyle earned his AB Economics & Environmental Studies at Brown University.  He graduated Magna cum Laude and with departmental honors in Environmental Studies. 

In today’s episode, Kyle shares his pricing journey and his perspective on how pricing is essential in decision-making. Check out his expert advice that will undoubtedly impact your business to its optimum level.  

 

Why you have to check out today’s podcast:

  • Know how to find the right value metric for your business 
  • Learn the difference between subscription and recurring revenue 
  • Discover the strategies in packaging and pricing metrics 

 

“Pricing is the tip of the spear. It’s a pain point that’s universal among companies, especially among earlier companies. But then once you do a pricing project, you uncover so many areas of opportunity for follow-on work.” 

– Kyle Poyar

 

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Topics Covered: 

02:59– Kyle talks about why he thinks pricing is a Trojan horse, a spear and a pain point among companies 

04:12 – Sharing the reasons why he left Simon-Kucher & Partners (SKP) and moved to OpenView 

06:31 – Talking about OpenView’s expansion team and the pricing challenges he encountered in their early stages of the business 

08:41 – Company in expansion stage defined 

09:49 – Customer Lifetime Value (LTV) as a marketing metric, and what ireveals about the status of your business  

11:22 – Spearheading the SaaS benchmark initiative as Kyle’s first roles at OpenView  

13:15 – Subscription and recurring revenue, understanding both revenue streams  

15:44 – How he helped one company pivoted from subscription to recurring model 

20:03 – Difference of packaging from pricing metrics: the good, better, best services 

24:08 – Not spending time to look at pricing as one of the biggest pricing problems that subscription companies currently have 

27:32 – Pricing advice to listeners – “If you start getting involved in thinking about what model (free trial or freemium models) could look like and what are the KPIs for it in your business, that elevates the role of pricing in the organization and helps you stay relevant with your users.” 

29:43 – His opinion on the similarity of designing the sales force out of the system and product-led growth 

 

Key Takeaways: 

“I think the biggest ‘AHA’ moment for CEOs is when someone finally tracks the revenue impact of pricing changes and they start counting all of the dollars that they’re making from making a pricing change. It’s amazing if you can bring proof points around impact and real dollars and cents. I think you can change minds quickly.” – Kyle Poyar 

“The early stages of business founders tend to undervalue their products. They start with extremely low pricing, and they don’t change that and increase it. There’s just a ton of opportunity in the early stages for business to increase prices and in many cases, not even seeing any sort of impact to win rate or conversion, just additional revenueand bottom-line profitability.” – Kyle Poyar 

“Subscriptions is a great business model for a lot of companies, and obviously the investors recognize that and are willing to pay a premium for subscription companies.  But you can get a lot of the same characteristics without actually having any sort of commitment for your customers. That can be a disruptive value proposition. And I think the investors will recognize companies that are disruptive and winning in the market and reward them.” – Kyle Poyar 

“I think structurally speaking, companies are not spending enough time on pricing.  The biggest challenge is just a lack of great pricing skills and then more tactically for businesses.  It’s a very competitive world in technology right now.” – Kyle Poyar 

 

Resources mentioned: 

 

Connect with Kyle Poyar: 

 

Connect with Mark Stiving 

 

Full Interview Transcript

(Note: This transcript was created using Temi, an AI transcription service.  Please forgive any transcription or grammatical errors.  We probably sounded better in real life.)

Kyle Poyar: I think some element of a free product or some sort of free self-service experience and then paywalls after the user or the customer has found value. I see that as so important to keep up with the modern buyer or the modern user of the software. I’d see that is very tied into the future of software and technology.

[Podcast Intro]

Mark Stiving: Welcome to Impact Pricing, the podcast where we discuss pricing, value and the fascinating relationship between them. I am Mark Stiving. Today, our guest is Kyle Poyar. Here are three things you want to know about Kyle before we start. First, he’s written an incredible book, an ebook called Mastering SAAS Pricing. Very well done. He worked for SKP, Simon Kucher Partners, for six years as a pricing consultant and a few years ago he joined Open View – venture capital firm. I find the idea of pricing experts joining VC and private equity firms. Absolutely fascinating. Welcome, Kyle.

Kyle Poyar: Thanks for having me on the podcast, Mark.

Mark Stiving: Hey, how’d you get into the pricing in the first place?

Kyle Poyar: You know, I went to Simon Kucher straight out of undergrad is interesting. I was actually an environmental studies major, but this was back in the recession when there weren’t a whole lot of careers, especially not in environmental protection, but I was fascinated by, so Frank Luby from Simon Kucher came on campus and he talked about uh, how people make decisions and how pricing is so central to decision making. And so how studying pricing is really both helping companies grow, but it’s also a better understanding of why people buy what they do and how to influence that. And I just was hooked from the beginning. So I joined Simon Kucher right after graduating and spent a good six years there and have now been I guess in the pricing world for about a decade now.

Mark Stiving: And you’ve done nothing but pricing. Although your title now is marketing. So I assume it’s a little bit bigger than pricing.

Kyle Poyar: You know, I always say pricing is kind of a Trojan horse, right? It’s one of the most cross-functional things in a business and if you work on a pricing project, do you get pulled in to do pricing, you probably end up getting a ton of great insights around the cost of different customer segments and the value of those segments. The sales process and how good the sales team is. That positioning and selling your product, the value of new features and also how to, how to have profitable unit economics. And so the way I’ve thought about it is pricing is sort of the tip of the spear. It’s the, it’s a pain point that’s universal among companies, especially among earlier companies, but then once you do a pricing project, you uncover so many areas of opportunity for follow on work.

Mark Stiving: That’s such a fantastic answer. Oftentimes when people say pricing, we think, or someone else thinks, oh, I have to put a value. I have to put a dollar value on that thing, whatever it is. But it turns out that once you get into pricing, it’s not only that very last, yeah, I got to put a dollar on it, but it’s the market segment. It’s, how do we talk about our products, how do we talk about the value, who values it? How much? And then you could even take it back to are they building products or features that have value. Pricing is just pervasive. I, I couldn’t agree with you anymore. That was amazing.

Kyle Poyar: Putting the actual price tag on the product is to me as one of the boring parts of pricing and I get much more fascinated by everything that surrounds it.

Mark Stiving: What caused the jump from SKP over to Open View? How did, how did the happen? Why did you do it? Why did they do it?

Kyle Poyar: So there are a few reasons. I mean from my standpoint, I guess it, when you are in consulting for six years, a lot of people get an itch to start taking on a more operational role where they can really see the impact of what they’re doing. And so I love the idea of moving, even though it wasn’t a role that was totally in house. It was a role where, you know, we’re long-term investors and companies and so we can really see the impact of work and be closely connected with our portfolio companies throughout their journey. And that journey includes pricing and a whole lot of other changes that are going to make to their business. So I thought that was an awesome opportunity. I also found in my consulting work that while as a consultant you sort of go where the money is, right? You work with clients that are going to have the ability to pay for a consulting project and a lot of cases that is larger, well-established, sometimes legacy businesses.

Kyle Poyar: But I had so much more fun working with the companies that were fast-growing startups and it was harder for them to afford consultants. But, uh, when we did work with them, they were so open to new ideas. They were very data-driven. They were not bound to the past. There was way fewer politics. And so I knew in my career that those were the kinds of companies that I was going to get most excited working at. But most of them don’t really need a full-time pricing person. And so it was a great opportunity to be able to work with these kinds of companies and then see a variety of them. So I like that’s more from my perspective and from open views perspective. In extremely specialized firm, we only invest in software companies at the expansion stage and because we have such a focused investment strategy, we have built out a practice called our expansion team that’s just dedicated to helping those companies grow. And the thesis is we’re seeing, you know, the same sort of patterns and at the same kind of company that we can, we can really have true expertise to help these companies identify what problems are going to run into and help solve those. So OpenView thankfully already had put a big investment in the expansion practice and this was just adding another part of that.

Mark Stiving: Were you the first pricing person on the expansion team?

Kyle Poyar: I was the first person that came from the kind of a pricing specific background. We had a couple of other people that had been in the role prior to me though that definitely did pricing projects and we’re fully aware of the importance of pricing. One actually went and joined the monetization team at Linkedin and so certainly the team had recognized the value of pricing before. But I, I think that when I joined we had a turbo charge that effort and got much smarter about tracking the value for our portfolio companies of how much revenue they generated from pricing changes. And we were able to evangelize pricing quite a bit more.

Mark Stiving: Nice. And you’re essentially taking best practices from one and teaching others. Uh, so it’s almost like being a consultant that gets to stick around a little bit longer.

Kyle Poyar: Exactly, exactly. And it’s fascinating to me where companies as they go through different stages of growth typically are encountering a lot of the same packaging and pricing challenges that they might see their businesses unique. But when you zoom out and compare it with a bunch of other companies going through the same journey, it’s amazing the kinds of similarities that come into play. I mean, one of the most obvious ones, and I’m hoping to talk about more, but one of the most obvious ones is that the early stages of business founders tend to undervalue their products. They start off with extremely low pricing and they don’t really change that and increase it as the products have matured, they built out new features, they’ve gotten smarter about selling the value of their product. Their brand is worth more. They make all of these investments, but they remain underpriced. And so there’s just a ton of opportunity in the early stages, but business to increase prices and in many cases not even seeing any sort of impact to win rate or conversion, just additional revenue, and bottom line profitability.

Mark Stiving: It is amazing that people don’t understand the value that they’re delivering and it changes, it increases over time as you put more and more features on your product. Before you, uh, before you dress that, the quick question, define expansion stage company for us.

Kyle Poyar: Yes, it’s a, it’s a little bit purposely vague, right? So, uh, I guess when we see it as their seed stage, right, where you’re kind of validating an idea looking for product market fit and then the expansion stage comes. Once a company has that product and market, they’ve really shown clear signs of product market fit. You can start to evaluate the different metrics around a software business. So you can measure things like CAC payback or net dollar retention or the logo retention in their cohort. So you can start to really measure the business like a larger software company, even though they’re still small, it’s normally kind of single digits in terms of millions of dollars of revenue. But like probably one to 10, one to 15 million in annual recurring revenue is common. But, uh, customers tend to be quite satisfied with the product and as you add sales count, those sales, that sales team is getting productive. So the total amount of revenue coming from new cohorts keeps increasing. So that’s a company we would see is firmly in the expansion stage.

Mark Stiving: That was an excellent answer as well. Uh, do you guys track LTV over CAC is one of the definers for you?

Kyle Poyar: You know, we don’t track LTV over CAC but we do look at the two, essentially, separately from each other. Uh, and so what we’ll look at, and part of it is because of that, how early some of the companies are, they don’t really have enough of a lifetime with their cohorts to track true lifetime value. But we are looking to see a lifetime of a cohort actually increases over time so that as you bring on new cohorts after factoring in churn, that whole value of, of that new revenue you brought in keeps increasing over time. So they see net negative churn in the business. That’s a huge signal for us. And then we want to see a CAC payback period that is, is able to support continuing to invest in sales and marketing. So normally that’s sub 18 months, ideally less than 12 months. We’ve had, we’ve had some businesses with CAC paybacks as low as one or two months, but then we, we weigh that against the expansion characteristics in the cohorts, how defensible the product is. If there’s a kind of a unique competitive advantage or a very large market size or there’s a number of factors that we, we also layer in.

Mark Stiving: Nice. Okay. I am geeking out and loving this conversation, but I’m picturing a half our listeners saying what’s CAC, what’s LTV, what’s NDR. Guys, if you don’t understand these, a drop me an email and we’ll uh, we’ll try to answer those questions for you and email. This is just too much fun for me though right now.

Kyle Poyar: Well, I geek out about benchmarks as well though. It’s actually one of the first things I did at OpenView was spearhead our SAAS benchmarks initiative. And we now survey about 400 software companies every year and we ask for metrics all around like their growth rates, their organization’s structure, their go to market strategy. Pricing is a big component of that as well. And we publish the results on our website and so that’s also a great resource for those looking to get smarter around SAS metrics. You can just type in SAASbenchmarks.com

Mark Stiving: Excellent. And I love the articles and writings that you guys do. It’s just really generous of you to put that out. I appreciate it hugely.

Kyle Poyar: Well that’s great to hear. I mean our goal is helping founders, especially at expansion stage software companies. We want to build a community around what it takes to grow a software company and also highlight trends that we’re seeing in the market. And so I think we were probably one of the early VCs to do content marketing. I know our founder, Scott Maxwell, said that when he brought up the idea of content marketing for a VC that everyone thought he was crazy. Like why? Why would a VC do content marketing? But now we’re seeing, you know, so many other venture capital firms doing the same thing because they realize it’s a great way of not only getting your brand out there but having people understand what, what it would be like to partner with you. Get a sense of the kind of expertise in and the resources that you know, you bring to bear as a potential partner for them. And so what we found that our community’s been super appreciative of it and our committee is actually grown to, we have about a hundred thousand email subscribers now who get our weekly newsletter.

Mark Stiving: Nice. And it doesn’t hurt. Maybe a company, we’ll learn something and be in an investible asset for you one day.

Kyle Poyar: It wouldn’t hurt, right?
Mark Stiving: They, let’s, uh, let’s try and make this useful for some of our listeners for a second. By the way, I’ve loved everything so far, but let’s talk about SAAS versus recurring revenue. Um, cause, cause I often hear the definition of a subscription is this periodic payment. And yet when we think about companies like Uber, we get, especially if you’re gonna be in a city like New York, there are probably people who ride Uber every day or every month and we have this recurring revenue. It’s like we want to treat them like a subscriber, even though they haven’t subscribed. Do you have a way to think about the difference between subscription and recurring revenue?

Kyle Poyar: I mean, I, I think that the metrics that go into looking at that, there are two kinds of businesses that are very similar, right? You’re looking at how much it costs to acquire different cohorts of customers and then what is the overall sort of lifetime value and how repeatable is the revenue model. And so if it is a business that is recurring revenue but not a subscription, but the lifetime value is low because folks stop using the product, that would obviously be a red flag. But if it’s more of like a payments business, like a, you know, a Paypal or a Stripe, where once you’re locked in with the customer, they’re not going to rip and replace their payment software. They might see some spikes. You know, up and down in terms of their, their business growth, but it’s essentially committed revenue even though the amount changes over time.

Kyle Poyar: I think that what’s so nice about that model is that while there is some more risk, right? You don’t, you don’t have the customer fully locked into a contract. It removes barriers to growth and you can, you can end up seeing just a lot of natural growth because you almost become, especially as a payments business, like an infrastructure that folks use and they, don’t even think about it. I think I would put AWS in that bucket as well. Yup. That’s a cost of doing business in the B2B world and I think that those businesses also, they have more pressure to deliver a great customer experience because if customers are not happy, they can stop using the product anytime. There’s nothing stopping them. But you know, if you feel like you have the best product out there, you can remove a lot of barriers in the process of selling to a customer or getting in the way of your customer buying and then see a great land and expand motion where you’ve got these great cohorts of, of uh, customers who were very profitable.

Kyle Poyar: So that’s some of the ways I think about it. I mean one of our portfolio companies, I actually helped pivot from a subscription model to more of a regular recurring model. It’s a company called Logical, they’re in the legal tech space and they do eat discovery software and their customers or the prospects of theirs were really hesitant to buy, especially pay annual contracts paid up front because they didn’t know what their usage was going to be. They also don’t have a ton of money lying around to pay for software and they want to build this back to their clients. And so I worked with Logical to introduce pay as you go, totally non-committed model to make it easier for their customers to buy. And they actually saw 500% growth in their customer base over the course of a year. And the revenue really took off was hockey stick growth in the business because they were selling to the customer wanted to buy and not necessarily the way that people were familiar with how a software business should operate.

Mark Stiving: Yeah, we sometimes want to force, everybody wants to go subscription today and it feels like we want to force fit every business model into the subscription. Not that subscription is a bad thing, but in some cases that may not be ideal.

Kyle Poyar: Exactly. And Subscriptions, you know, it’s a great business model for a lot of companies and uh, obviously investors recognize that and are willing to pay a premium for subscription companies. But you can get a lot of the same characteristics without actually having any sort of commitment for your customers. And that can be a disruptive value proposition. And I think investors will recognize companies that are, you know, disruptive and winning in the market and reward them.

Mark Stiving: Yeah. It’s funny because you said the word commitment a couple of times and I don’t think of subscriptions is having commitments. I use, I use a million different subscription businesses, but let’s just talk about Calendly for a second. Right? I use Calendly to schedule meetings. I could cancel them at the end of this month. So there is no real commitment and yet they, you know, I subscribed to him, I’m going to pay him every month just like I would use Uber if I lived in New York. Does that make sense?

Kyle Poyar: I, yeah, I mean it’s fair, but Uber could offer a monthly subscription, right? Where your pre committing for that month of how much you want to use Uber instead of deciding, you know, on a Monday, I’m going to use Uber today and I’m just going to pay for that single use of Uber. So there is a commitment, even though it’s a small commitment level. Uh, and actually it’s a, it’s a good to shout out about Calendly. They’re a portfolio company of ours and uh, they’ve got a great, great business model.

Mark Stiving: Okay. I didn’t know that, but glad. Glad I could help.

Kyle Poyar: Always be promoting. Right?

Mark Stiving: Yeah, exactly. The reason I pushed back on (inaudible) a little bit is that I think one of the biggest advantages to subscriptions is that our customers don’t have to make a big commitment. Think about buying a perpetual license versus a monthly subscription. And the level of commitment is, is miniscule.

Kyle Poyar: Definitely it’s, I mean I think in general we’ve seen a trend away from huge upfront fees, customers getting locked in and instead of having that on sort of the on-prem license maintenance model, then moving to like a SAAS world and multiyear contracts and then annual contracts. And I think now we’re in a world where people expect much lower barriers to getting into a product and so monthly subscriptions which have you know, much less commitment or that purely pay as you go models. Freemium models are certainly taking off. And I think looking at the success of companies like Zoom or Slack, it shows how great some of those business models can be. And I think Slack is actually a good example of per year point were for the plans they charge based on the number of active users in a month. And so they’ll actually credit you if uh, you know, some people were inactive and in a month, didn’t use slack. They’ll give you a credit for your account. Totally fair billing. And so not only is that not like committing you into a, at the number of users for a year or multiple years, but it gives you total flexibility and if you just stop using it, you’re not paying for it.

Mark Stiving: Yeah. Let’s talk about bundling. Listen to what this usage thing again, because I find all these fascinating and I like to push on the edges of things that aren’t overly clear. Your research shows that a user is the most common pricing metrics by far. And then second is usage. And we think of usage as a pricing metric. Companies often bundle those into the packages that they create. So when they create a good, better, best package, it’s usually pricing metrics as one of the things they put in there. Do you differentiate packaging from pricing metrics in your mind?

Kyle Poyar: They’re definitely interrelated for sure. And we’re seeing packages get increasingly sophisticated in terms of thinking about [inaudible] because to me the, I mean the main goal that I have when I’m working with a company is I want to have multiple axes to be able to land and then expand a customer over time. Those axes could be through the value metric alone, which could be users, the amount of usage or another metric entirely. And then you’ve got packages which could be some sort of combination of features, uh, of usage of services and what have you. And so I think to be the first thing I look for is how do you get those multiple expansion routes, which is just so important for a business to be able to grow over time. And then what I think about metrics is attend to be looking for the primary unit that determines what kind of value a customer receives.

Kyle Poyar: Like what’s most predictive of value. But then you’re also looking for something that’s acceptable to the customer that’s predictable enough that they can budget for it. And buy it at that they accept, right that they, you also have the systems to be able to bill around and in which I think billing systems are finally catching up to the way pricing people want to approach pricing for products, but I think a lot of companies realize users are the most common value metric out there but aren’t totally right for a lot of businesses. Like for an infrastructure monitoring software. It just the number of users that are going to log in to monitor your infrastructures that really predictive of the value a customer gets or is it more about the size of those applications that you’re monitoring and how mission critical those applications are? And so I think that I prefer a usage metric if we can find one that’s acceptable for our customers and then if we can’t, I like coming up with another metric like users but working usage into the packages of the offerings to try to bring some of that kind of a customer value and connect that with what people are paying.

Mark Stiving: When you see pricing metrics and let’s say that we’re actually going to charge for the pricing metric, whatever it happens to be. So it’s um, you know, the size of the infrastructure that we’re monitoring at the, at the moment. Do you still put those into tiers or do you tend to charge by the unit and now we’re getting back towards that recurring revenue versus a subscription thing almost?

Kyle Poyar: It really varies. I mean I think to me the the kind of ideal type of model is more of like the Twilio model where you can pay for it on a, as it’s used basis and you don’t necessarily need to make a commitment purely pay as you go. And that’s super developer friendly especially. But then once you get to a certain amount of spend and you’re, you get to a level of predictability in your usage where you’re not just trying something out over time, you can get volume discounts for committing to a certain level of usage. And that’s a win-win for both the customer and the vendor where the vendor gets that predictability and that higher commitment and the customer gets discounts off the pay as you go price. And then there’s still normally kind of some overage charges or different language on the event that the customer ends up using a lot more than what they had initially committed to. But I like that model where it’s a combination.

Mark Stiving: Nice. Yeah. I’ve got two more big questions for you. First one, what do you see as the biggest pricing problem that subscription companies are having today?

Kyle Poyar: The biggest pricing problem? Uh, that’s, uh, that’s a difficult one. I mean, I think structurally speaking, this is probably not as useful to, uh, the audience of this podcast that I think structurally speaking, companies are not spending enough time on pricing. They don’t take a scientific or kind of a rigorous enough approach to optimizing their pricing and testing it and collecting data on it. And we’ve gotten smart about just about everything in the technology and if you look at the level of sophistication of the operations of a tech company, it’s like, it’s just so different from where we were a few years ago. But pricing hasn’t really, and I’ve started the year companies that are trying to bring on pricing talent, make their first dedicated pricing higher and have that happen earlier in their life cycle, but then those companies are having trouble figuring out what’s the right profile to hire for, who’s going to do a good job in this role and then finding that talent.

Kyle Poyar: And so I think like structurally the biggest challenge is just lack of great pricing skills and then more tactically for businesses of, it’s a very competitive world in technology right now. It’s never been easier to start building a product and getting something released. And what I think that means is that most businesses are finding that they have more competitors, that when they, when they make a product change, they, that gets copied faster. And so there’s increasingly the commoditization of features where we’re seeing features were like if you look at a Salesforce integration for instance, or a single sign-on integration that used to be a premium feature for like the top tier packages. And now it’s something that people just expect. Like if you can implement it yourself with Zapier, why should you have to pay, you know, thousands of extra dollars to buy the more expensive package where this is included. And so I’m seeing a commoditization of certain features and it’s hard to keep pricing power in the market.

Mark Stiving: Yeah, I think that’s pretty common in most technology businesses where, you know, technology evolves. You, you gotta stay, you gotta stay ahead of the competition. You can’t just always capture the same value you use to capture. By the way on the first point you made, I think every listener in that still with us today is sitting there saying, would you please call my CEO and tell him that?

Kyle Poyar: I mean it’s uh, it’s interesting though I evangelize quite a bit, the importance of pricing, I think the biggest AHA! moment for CEOs is when someone finally tracks the revenue impact of pricing changes and they start counting all of the dollars that they’re making from making a pricing change. And you go from seeing a company that maybe has not made a pricing change in four or five years and it was extremely resistant to a pricing change to someone, a CEO that wants to now all of a sudden change prices like once a month then is, that’s all they think about for the next quarter. It’s amazing what that if you can bring proof points around impact and real dollars and cents, I think you can change minds quickly.

Mark Stiving: Nice. Nice. Last big question for you, Kyle, if you don’t mind. What’s the one piece of pricing advice you would give our listeners that you think could have a big impact on their business?

Kyle Poyar: One piece of pricing advice? Ah, this if I had just one, that would be, yeah, I could probably make a lot of money off of that. But I think to me that one of the biggest trends that I’m seeing with our portfolio and in the companies that are IPO so over half of the IPO is from 2018 and 2019 had been companies that OpenView says, or we would categorize as product like growth companies where the product is at the forefront of how they acquire, convert and expand their users. And so we’re just seeing this trend where companies that have an element of a product like growth can grow faster than their peers and can do so in a way that’s more efficient. And these businesses, a lot of them have free trial models or freemium models, but I think some element of a free product or some sort of free self-service experience and then pay wells after the user or the customer has found value.

Kyle Poyar: I see that as so important to keep up with the modern buyer or the modern user of the software and they don’t necessarily want to have, you know, a lengthy demo and uh, it’s also just really expensive to acquire leads. And so to the extent that you can bring some virality and bring like a whole lot of, of demand for your product through a great free experience, uh, without distracting from the paid experience. I just see that is very tied into the future of software and technology and many pricing people that are probably not as comfortable with those models. But I think if you start getting involved in, in thinking about what that model could look like and what are the KPIs for it in your business, that elevates the role of pricing in the organization and helps you stay relevant with your users.

Mark Stiving: It certainly requires you to understand the packaging. What are you going to let people have for free, for how long, what’s going to happen there? So I think that’s a fabulous answer. I’ve heard other investors talk about trying to design the sales force out of the system and that’s pretty similar to product-led growth. Would you agree?

Kyle Poyar: Yup. It’s very similar. I think that to me, you shouldn’t necessarily have sales as a roadblock to that to the buyer being able to have a great experience, but you can sort of recraft the role of sales and there can be people in these models, but sales starts to act more like a consultant or as a product expert. Uh, it’s almost more like customer success. You’re automating a lot of the process of, you know, instead of having an SDR cold calling folks and that, you know, a detailed sales qualification and then a demo and then a solution validation and all of these steps in a lengthy sales process, you can automate a lot of that away. For sure.

Mark Stiving: I once worked for a firm where the sales force is a job was defined as helping buyers buy. All right. Kyle, thank you so much for your time today. This has been fantastic. Um, if anyone wants to contact you, how can they do that?

Kyle Poyar: Thanks for having me, Mark. Feel free to connect with me on Linkedin or you can follow me on Twitter @PoyerK,

Mark Stiving: @PoyerK. Excellent.

And episode 20 already done. That was nice. Uh, Kyle was absolutely brilliant. If you got value out of this podcast, would you please help us out, subscribe, leave a review, tell a friend every little bit helps and we are hugely appreciative. Also, if you’re a B2B company needs to better understand subscription pricing. Check out our new subscription pricing course. If you’d like to learn more about the course or have any suggestions or comments, please drop me a note@markatimpactpricing.com as always, don’t forget to listen next week to another episode of Impact Pricing.

 

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