Ep13: Impacting the Future of Pricing and Subscription
Where is Impact Pricing heading? What are our goals?
Many questions have been raised to us when we started the company. What is the company doing? How do we run our business? How do we make money? But the question I like the most is about defining our goals.
In today’s podcast, I’ll discuss more of it with the hope that it’ll spark more of your interest in pricing.
“Our vision is to build a company focused on educating other companies about pricing and value.”
– Mark Stiving, Chief Pricing Educator
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The Value in Value
Starting another new company has always been a challenge. One of the most significant problems I see though in almost every single company is they don’t understand value. Salespeople don’t know how to sell it. Marketers can’t talk about it. Product teams don’t build it. It is a huge problem, and that was going to be my main focus. I help companies know what value is and help them create, communicate and capture it through education. I realized I don’t want to be a consultant. I want to be an educator.
The Power of Subscriptions
Subscription pricing is the hype for years now. It is amazingly different and powerful. There are several excellent sources of information about managing subscription businesses, and they all seem to be on the leading edge. I fathomed nobody’s teaching the basics and so, I decided to focus on pricing.
Choosing between Value or Subscriptions spells dilemma
Choosing between these two this seems like a significant problem to most people who are into pricing.
- 1st dilemma: Do I focus on subscriptions or value or both?
When coaching clients, I always tell them the focus is key. You have to pick. Eventually, I chose subscriptions. I’m hoping in six months I can start shifting back toward value and you’ll hear more about later.
- 2nd dilemma: Should I be a small Solopreneur or Should I build a company to do what I want to do?
I have to build a company. There’s so much pricing knowledge to share and impact. Pricing is destined to be more than my personal brand. Currently, we have six part-time people and me to work on marketing and content. I’m the only full-time employee, but the team is amazing and growing. We’re unbelievably positive with our cash flows already.
We currently sell two products, but we don’t actively market them.
I often get calls from companies who want me to do consulting for them, but I don’t want to be a consultant. Instead, I offer the buyer a mentoring program and these consist of weekly phone calls with me to talk about their pricing issues. They do the work. I spoke with them about it. It works out well for both of us because my mentoring program costs a whole lot less than a consultant would and they learn along the way. I get to keep my fingers involved in real problems and test new ways of explaining things one person at a time.
- Custom Content
Twice in our companies have called and asked for webinars on specific topics. One was pricing metrics, and the other was the psychological aspects of pricing. Our first real product is set to launch in May. It is our course on subscription pricing.
The webinar has various topics, and one of them is the comparison between subscriptions and traditional business.
Here is a rundown of the differences between these two types:
- Both are the source of revenue and revenue growth. Traditional companies rely almost exclusively on winning new customers. Subscriptions do the same, but they also focused on retaining the current customers and expanding or growing the revenue they get from existing customers. These required new metrics, new thinking, and new pricing methodologies.
- The pricing lever companies use in the subscription are a little bit different than they are in traditional. Both traditional and subscription businesses are much better off when they define their market segments, so that’s a common lever between the two packaging. Best packaging is a standard lever, but traditional businesses usually define a set of products and rarely change them. Subscription businesses use packages, frequently change them and often based on usage data.
- Subscriptions use pricing metric while traditional companies don’t. It is objectively a critical topic to know what businesses charge.
I had a shocking request from a very well respected B2B (business to business) subscription-based company from Silicon Valley and asked me if I could teach them the pricing metrics. It was an unexpected question since I assume, they already knew this. I suppose they knew way more about this topic than I did since they live it.
“All companies set prices, yet very few know what they’re doing when they’re setting their prices. Why wouldn’t that be the case with subscription pricing as well?”
– Mark Stiving
We said yes to the opportunity, and that’s part of the subscription pricing course. It is one piece of evidence that gives me massive hope that there’s going to be a fantastic demand for this course.
Our Subscription Pricing Course
In our model, our very first class consisted of four 90-minute modules, jam-packed with information about subscription businesses. The two-day class has lots of exercises so, the students will know the topic more in-depth. The course is instructor-led. It will either be in person or online, so we hit a lot of interaction and feedback from our students.
The future of Impact Pricing
Our vision is to build a company focused on educating other companies about pricing and value. We’re currently looking at a few video training platforms and will likely offer a course on how costs related to pricing for free. We’re going to provide that one for free as a way to gain experience on the platform and to get feedback on that type of training from our clients. We will add the topics of creating, communicating, and capturing value as soon as we possibly can. Since we’re about to launch the first product and hoping that with all signs, it’s going to do exceptionally well. We’ve started to think about how to scale this as a business and, you’ll hear from us on that soon. But for now, we don’t need an answer immediately.
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