Impact Pricing Podcast

Ep193: The Future of SaaS Packaging with Dor Sasson

Dor Sasson is the co-founder and CEO of Stigg, a company that helps clients grow with pricing through a software that enables them to control what can be priced and packaged separately, and make adjustments without having to do coding. He has also been a Senior Product Manager at New Relic, a technology company which develops cloud-based software to help website and application owners track the performance of their services.

In this episode, Dor shares how his experience in New Relic led him to explore the field of SaaS packaging and how his company, Stigg, aims to provide solutions to packaging problems from the developers’ end.

Why you have to check out today’s podcast:

  • Pickup ideas about the adjustments to be done when switching to usage-based pricing
  • Discover how Stigg could help you on your packaging and pricing problems
  • Learn the importance of asking the right questions in the success of businesses

 

“Talk to your customers, ask them about their willingness to pay. There are amazing frameworks out there for how to ask the right questions. It will unlock immense, deep understanding of how your customers think about your pricing and will really help you to nail down your own pricing strategy.”

Dor Sasson

 

Topics Covered:

01:11 – How Dor got into pricing

03:59 – What is “entitlements”?

04:52 – Adjustments made by New Relic upon switching to usage-based pricing

08:09 – The work that Stigg actually does

15:48 – The difference between buyers and users

16:35 – Situations in the past where Stigg would’ve been a big help

20:51 – Dor’s vision and mission for his company, Stigg

23:49 – Pricing table topics: “Good, better, best” pricing is significantly more effective within a market segment

26:38 – Dor’s pricing advice

 

Key Takeaways: 

“The way we like to think about Stigg is, we want to build out an infrastructure that is so easy to implement and so easy to adopt from the application side that it makes it really fast and easy for product and growth teams to introduce new pricing plans, changes in existing pricing plans.” – Dor Sasson

“The value that we unlock is for builders and growth leaders out there that are looking to use pricing as a vehicle for growth and help their companies continue to adapt to changing markets, continue to adapt to how they scale into new customer segments, and basically make sure that they give their buyers more options to use their software.” – Dor Sasson

“Our North star by the end of the day is not only helping our customers be faster in the way they introduce changes and launch new pricing, but also ultimately unlock growth by allowing more flexibility for their buyers to use and consume their products.” – Dor Sasson

“There is no “one size fits all” in pricing. The first thing you got to do is understand in a very deep and thoughtful way, who are your customer segments, and good, better, best is actually a really good strategy to approach different customer segments and make sure that you build your pricing in a way that fits or is more aligned to the way each segment perceive value.” – Dor Sasson

 

People / Resources Mentioned:

Connect with Dor Sasson:

Connect with Mark Stiving:   

 

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.)

Dor Sasson

Talk to your customers, ask them about their willingness to pay. There are amazing frameworks out there for how to ask the right questions. It will unlock immense, deep understanding of how your customers think about your pricing and will really help you to nail down your own pricing strategy.

[Intro]

Mark Stiving

Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the algorithmic relationship between them. I’m Mark Stiving, and our guest today is Dor Sasson, and here are three things you’d want to know about Dor before we start. He is the co-founder and CEO of Stigg, a company we’re going to learn about. He’s been Senior Product Manager at New Relic, which is quite impressive. He plays the bass guitar, and by the way, his wife is 40 weeks pregnant, so if his phone rings, we may have to cancel the podcast recording.

Welcome, Dor.

Dor Sasson

Hi. Hey, Mark. Happy to be here.

Mark Stiving

Oh, good. How did you get into pricing?

Dor Sasson

A lot of it is somewhat accidental. My first interaction in pricing in a SaaS world started at my second year at New Relic where I basically got an email with a spreadsheet attached to it. And inside that spreadsheet there was a tab that says “Entitlements”. And as the product manager that led our air mail product line, I was basically expected to update our specific features and product line in the right way and in the right structure of our pricing plans. Now, it was the first time in my life that I ever heard about the concept of entitlements or how these fits into our monetization strategy as a company. And that was basically the first time that I realized there is a huge world out there that I have zero knowledge or understanding of. And it was basically the first step I ever made into this world.

Mark Stiving

Nice. And so, you decided you would go start a pricing company because you know nothing about pricing.

Dor Sasson

Almost. So, basically what happens right after is a chain of events that got me to the point where I consider myself a pricing nerd, which is, we had a huge pricing overhaul derailing that year. Our new CEO, Bill Staples, came in and said, “Hey, we’re going to basically change our go-to market strategy back into being freemium, usage-based pricing”, and that meant a lot all across the business, all across the organizations. And one of the things that, you know, one of the key components there or part of it is how is our product going to fit into this new strategy and how do we basically re-architect all of our product to fit this new strategy, this new model. and spending almost a full year helping to support this pricing overhaul, we, basically myself and my co-founder and CTO Anton together, we used to work together at the time at New Relic, we got really excited about what it means for companies to be able to be a lot more flexible and nimbler in the way they build their pricing, in the way they go to market. And our first problem space area that we were excited about was, “Hey, how do we make it so much easier for companies out there to introduce changes to the way they go to market in a much faster, easier way that doesn’t require a full long year to introduce those changes?”

So, to be fair, our first step was realizing how big of a problem it is, and we started to think about what are good ways to approach this problem, and what are good ways to help others to build in this space.

Mark Stiving

Okay. So before we jump into Stigg, I want to ask you a couple more questions about what happened in New Relic. First off, tell us all what do you mean when you say the word entitlements? Or define entitlements for us.

Dor Sasson

Entitlements, at the very basic level, is an access control logic which defines for which customer or for which account, if you will, or for which practitioner, what are they entitled? What is the access that they are permitted to access within the product, within the SaaS product? And these are typically a configuration that is very straightforward, that contains under which plan, pricing plan, does this user live and what are they entitled, what are they permitted to access based on this pricing plan?

Mark Stiving

Got it. That makes all the sense in the world. I often think of those, at least in the world that I was in was we would put software flags or software switches on features for different customers.

Dor Sasson

Mark, you’re completely right. It’s very much similar to feature fly me, if you will. It’s like a cousin of this certain configuration, if you will.

Mark Stiving

Okay, good. Because I was worried that I didn’t know what entitlements meant around pricing, but it’s actually a product thing, which is really good. And so then how did you have to tweak the product at New Relic to be able to match… And by the way, what I loved about the new CEO is he came in and said, “Let’s do product-led growth, right? Let’s do freemium and follow that up with usage-based pricing”. So that’s wonderful. But how did you have to change the product to match that strategy?

Dor Sasson

Mark, I saw some of your articles and blogs and I saw you writing about it a little. So basically, the number one thing, when you go usage-based, you want to figure out what’s your unit of economy, right? Like what’s the value metric, what’s the thing that your customers perceive has value and are willing to pay more as they consume more of. And figuring that unit and really being good at capturing this volumetric is not as easy as some may think when you do this transformation.

So, the number one thing was thinking about a product which at the time was very much a platform with many different product lines and thinking of a good way to consolidate and create this single or multiple value metrics that can be captured as value by our customers, existing and new ones, and basically allow them to continue to consume more of those as they use more of New Relic, as they use more of the product. And so, the number one thing that you have to do when you think about your pricing in that essence is that if you have products that weren’t ever considered or evaluated before in the form of the unit of volumetric, of a unit of economy of this sort, now you need to re-architect the way the customers engage with these features, with these product lines all along this single, consistent, and concise volumetric all across the different elements of the product.

So, the first thing was to figure out, “What is this metric? What is this thing that our existing customer base and our raving fans consider is valuable?” And then it was a product question to figure out “How do we inseminate and instrument this is volumetric all across our different product lines?” So, this was merely like, from a product perspective, I guess this was the first question obviously from customer success, sales and other organizations. There were a lot of other questions as well involved, but this was from a product point of view. That was the first question.

Mark Stiving

Got it. And really, if I were to repeat what you just said, it was “We had to make it so once we’ve decided what our – I use the word pricing metric for this case – what are we going to charge for. Once we figured out what our pricing metric is, then we have to make sure we’re measuring for that in all of the different applications.”

Dor Sasson

Yeah. Or if we don’t, how do we then introduce these additional value-add in different ways, right? Like, are they add-ons? Are they free features that you use to create more engagement? Are these relevant for the expansion journey? Like, when you think about the structure of like the Win, Keep, Grow type of mindset, right? So, which feature falls into which realm? And how do you build that in a way that makes sense?

Mark Stiving

Okay. Kudos for mentioning my book. Good job, Dor.

Dor Sasson

I love that, but that’s a sidebar conversation. Happy to talk about your book as well.

Mark Stiving

Thank you. Okay, so now I want to know, what is it that Stigg does? And I’ll just be honest, I’ve been on your web page and I don’t understand.

Dor Sasson

It’s not the first time I hear it. It might just mean that we need to start really be a lot more precise in the way we try to communicate what we do for our customers. But the gist of it is that Stigg is a pricing infrastructure, first and foremost, for developers. And I know that’s going to sound odd for a lot of people that are listening to us, because typically, pricing is not considered the developer problem. People think of pricing as a business problem, go-to market problem, problem of CRO to revenue organization, sales organization.

So how come that we are trying to cater and tackle pricing from developers’ realm?

The way we like to think about Stigg is, we want to build out an infrastructure that is so easy to implement and so easy to adopt from the application side that it makes it really fast and easy for product and growth teams to introduce new pricing plans, changes in existing pricing plans.

When I say pricing, I don’t necessarily just mean the dollar tag and the dollar value that you put on the pricing plans. But I am a lot more inclined to chat about the design of the packaging structure, the value metric, which features lives in which plans, how do you design your packaging in general? And all of those questions become these days more and more product questions and growth teams questions, because pricing is becoming more and more critical components of the product thinking, especially in the product-led world, where the way customers engage and basically adopt to your software is not only a function of how well are you doing in the way you introduce features and functionality, but also a lot more driven by the way you build your packaging and the way you introduce value over time.

So Stigg is essentially, in a nutshell, it’s all the Lego pieces you need to introduce all the variety of different ways to monetize your software where we obstruct the way entitlements in that regard.

Mark Stiving

Okay. So, I’m going to repeat what you just said and make sure I understand it. What I think you said was “What our software is going to do is give you the platform to take all of your features and manage the entitlements. We’re also going to monitor usage of all these different features. So now in case you pick one as a pricing metric, we have the ability to use that as a pricing metric. And so, we’re giving all these tools to make it easy for developers to do that.”

Dor Sasson

Spot on. And once you integrate with Stigg, you no longer need developer time to continually make those changes because we’ve built a no code UI that any non-developer out there can drive changes, AB Tests, Experiment. Stigg also seamlessly integrates with your billing solution such as Stripe or Charge B, CRM, such as HubSpot, Salesforce, and even your public website. For instance, if you’re using CMS like web flow. And so, essentially what you’re getting is whatever change you do within the realm of Stigg immediately permeates and updates all of those notes that I mentioned.

Mark Stiving

Okay. So first off, I got to tell you, I love this. And here’s why I love it: because oftentimes when we think about value and pricing, it’s “How do I put a price on the product?” But putting a price on the product has to do with “How much value have we built into the product?” And so, we’re always tweaking. Where’s the value, who’s getting what value, how do we decide what features are going to go in our good, better, best packages or different market segments? And I don’t think companies spend enough time thinking about value when they’re doing their product development. And so, this tool gives us an easy way to go back and say, “Oh, now I can figure out what people really do value and how I really should put together packages and I can do this after the fact or continue to tweak it as we continue to learn more about our market and we’re putting our products out.” So, I love this.

I’m going to coach you for just a second on a podcast. I hope you don’t mind.

Dor Sasson

Yeah, go ahead.

Mark Stiving

There is not a developer in the world who wants to buy this from you.

Dor Sasson

Not a single one, Mark. Not a single one.

Mark Stiving

But I think there are tons of companies that want to buy this and have their developers use it. And so, it’s one of those things where I would stop saying, “I’m building this for developers”, and I would start saying “I build it for product teams or I build it for companies to give the flexibility and all that power”. Because I think what you’re doing is fascinating.

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Dor Sasson

So, Mark, I’ll piggyback on what you just said and I’ll add to that.

So, as I mentioned earlier, there’s not a single developer we’ve met. And we talked to hundreds of founders and builders at all stages, that was the first one in line to say, “Oh, I got to use this.” Like, “I really want to use this”. Because typically, the conversation starts with the founders or, you know, C-level executives, VP’s who are excited about what we can unlock for them.

The thing is, Mark, that like many other products these days, eventually they trickle down to the developer that is working inside R&D and is the one in charge of implementing billing, or implementing authorization, or authentication, or all those type of elements inside the application that are not necessarily core value. These are elements that every SaaS product has to have.

And so, the way we like to think about Stigg is that we are developer-friendly, right? Like we are developer-first approach to pricing where it should be super easy to adopt from the developer end, but obviously the value that we unlock is for the business. The value that we unlock is for builders and growth leaders out there that are looking to use pricing as a vehicle for growth and help their companies continue to adapt to changing markets, continue to adapt to how they scale into new customer segments, and basically make sure that they give their buyers more options to use their software.

Mark Stiving

Okay, I think you’re on the right track, but I’m going to do a quick lesson for you. There’s a difference between buyers and users. And no developer is a buyer that says, “I want more flexibility so I can tweak the product that goes out”. Every product manager wants that, every executive wants that, but no developer does. Developers, on the other hand, are users, and we don’t want them standing in the way. We want them to say, “Oh my God, this is easy. And if you’re going to keep asking me to do these hard things and give me this tool to make it easy for me to do it”. And as a great rule, we market products to buyers, we build products for users.

Dor Sasson

Spot on. We have 100%, we are in agreement on that, Mark.

Mark Stiving

Awesome. Alright, so what else do you want to tell me about Stigg? Because I’m hoping you guys are successful because I think what you do makes it easier for my clients to be able to tweak their products and make smarter decisions.

Dor Sasson

Yeah. And I’m actually curious, Mark, too. Let me know if this is an interesting conversation to have, but I’m curious to learn maybe from your perspective, like if in the past journey working with different companies, what were encounters or events where there’s something like Stigg would have been helpful or useful in helping other companies roll out their pricing faster or deal with changes in a way that is more efficient for them and for their businesses. And I wonder if that’s something that you’ve seen or heard before.

Mark Stiving

Can I just say every software company?

Dor Sasson

That’s an answer I like.

Mark Stiving

Here’s what happens in the world that I live in: When I am out coaching a client or working with the client, what we typically do is we look for what are the wins that we could go implement. Because there are always these roadblocks in our way that say, “Oh, we can’t go do that because of”. For example, and one that’s not really related to you is, “Oh, I can’t do price segmentation because our pricing system doesn’t allow us to do that. We’d have to replace the entire pricing system if we want to do that.” Okay, great. So that takes a tool off of our plate that we can no longer go do. And if I’m dealing with a company that has a software package and we say, “Okay, now let’s figure out how we build good, better, best software packages for you”. It’s like, “No, no, no, we can’t do that because it’s really hard for us to go rewrite all the software and re-architect everything” or we say, “Let’s go pick a new value metric or a new pricing metric”. And they say, “Oh, we can’t do that because we’re not monitoring usage of the individual features of our products”. So, in almost every case, there are situations where customers, had they implemented something like this upfront, so they had the ability to tweak products quickly, they had the ability to measure usage on a feature-by-feature basis. We could make much smarter, faster decisions.

Dor Sasson

So, you’re speaking my language, exactly. When we look at what we do and Stigg, our North star by the end of the day is not only helping our customers be faster in the way they introduce changes and launch new pricing, but also ultimately unlock growth by allowing more flexibility for their buyers to use and consume their products. So ultimately, providing them with the ability to be smarter in the way they approach the pricing conversation and empowering them with intelligence around and other means to make informed decisions in the way they approached their pricing plans. Strategy conversations is something that we are very excited about.

And so right now, we see most of our success with companies that are basically trying to figure out their pricing for the first time, companies that are looking to introduce and basically build out their pricing plans for the first time. And so ultimately, we see a world where Stigg would be the infrastructure that allows any SaaS company at any stage to be a lot more nimble in the way they drive pricing changes and introduce new ways for their customers to buy their software. And so, even when you think about pricing models, the SaaS world pricing models has been like a pendulum where in one era it was more about subscriptions, now it’s more about usage-based. And we see that consumers way of buying software is somewhat of a fashion to some extent. And so, the ability for our customers to be faster in the way they react to those changes and those trends is what can help them sometimes be even more competitive than others, be able to introduce value in in more appealing ways for their buyers.

Mark Stiving

I think one of the challenges that you’re going to face – and you could tell me if this is a wrong statement – but it feels to me like this is so much easier to do if I do this before I write my software, right? If I adopt your platform before I write the software, as opposed to saying, “Hey, I’ve got New Relic‘s software. Now I need to go put it on this platform.” Right? And assuming that’s true, then I think the challenges most people who are writing code for the first time are so focused on “Am I getting the problem right?” Right? “Am I really solving an important problem?” And they’re not really focused on “What’s the future look like once we once we cross this first hurdle?”

Dor Sasson

I think you’re depicting the challenge in the right way. I think, ultimately, there are certain compelling events in the lifetime of every company that drives them, and there are big motivators to adopt something like Stigg. Because by the end of the day, you’re going to have to introduce pricing or drive those changes. And it’s either you end up duct taping them by yourself, or are you going to use top, world-class platform to help you do that? And so, we need to build our software. We need to build this thing in a way that is compelling. And it’s so easy to add up that we are there at all those junctions, all those compelling events where it’s either, first pricing, it’s either, you want to AB test and experiment. It’s either you want to migrate away from one billing solution to another. You want to introduce self-service for the first time. You want to introduce new ways to expand existing plans. We even learn that sometimes M&A is an interesting trigger, right? Like somebody acquired a big product and now you need to introduce it inside your own existing pricing models. So how do you do that? So, there are a lot of interesting and exciting – again, I’m pricing in that. For me, it’s exciting – there are a lot of exciting events in the lifetime of any company that requires them to think about their pricing. And typically, what happens is it feels like a lot to founders and C levels to do this overhaul or to introduce such changes because it feels like toil. And so, everybody tried to just postpone this infrastructure work because nobody feels it’s going to be exciting for them to be building this.

And so, Stigg has to be top of the class and really being out there at those moments and being able to show value in a breeze in such a way that it doesn’t make sense for anybody to continue to duct tape their infrastructure. So, for us, that’s what we’re here for. This is what differentiates us. This is what we decided to go on and build Stigg. And we are already seeing those different events coming to life. We’re already starting to see some patterns where folks are coming in and saying, you know, inbound, right? Like, “This is exciting for us. We need your help.”

Mark Stiving

Nice. Dor, it has been fascinating so far. I love the product and I wish you guys all the luck. We have two more things are going to do on the podcast. First, we are going to play pricing table topics. You and I talked about it a little bit beforehand, but for the listeners, I have a deck of our Impact Pricing playing cards right here. Just shuffled them up once. I’m going to randomly draw a card for Dor. I’m going to read it, and he just gets to talk for 1 to 2 minutes in order to practice his impromptu speaking, as well as just share what he knows about pricing. So, are you ready, Dor? 

Dor Sasson

I’ll do my best, yeah.

Mark Stiving

That’s all we could ask. Just do your best. So, here’s the three of clubs. “Good, better, best pricing is significantly more effective within a market segment.”

Dor Sasson

Okay, I’ll start by saying that typically, what we would like to say to other folks we chat with is there is no “one size fits all” in pricing. The first thing you got to do is understand in a very deep and thoughtful way, who are your customer segments, and good, better, best is actually a really good strategy to approach different customer segments and make sure that you build your pricing in a way that fits or is more aligned to the way each segment perceive value.

Now, the devil is in the details because the number one thing is the way you think about your good, better, best structure is, its success. And the result is very much tied to how well you’ve been doing your research and understanding, on willingness to pay along each segment and being very precise about who are your segment, basically, which audiences are you selling to and really be thoughtful in the way you describe them.

And so basically, if you’re doing a really good job at your research phase and you’re good at describing those customer segments, good, better, best definitely can be a really good approach to your packaging and ultimately end up with helping you have a much better success and results in the way you introduce your pricing to each of those segments.

So yeah, I think good, better, best is one way to go about pricing. There’s no one size fits all. And so, I guess that’s what I have to say on this topic.

Mark Stiving

Alright. Nice job. Out of curiosity, was that hard? Was that easy?

Dor Sasson

I actually like to be pushed to my limits. I guess that’s why I’m a founder to some extent. I like to be pushed to the limit. And what I like about it is that it makes you try to be really thoughtful in the way you answer, and what your answer is. I guess because I also have the language barrier, so I also need to translate what I’m saying as I’m speaking out loud. That’s an interesting experience. I like it. You should definitely do this more often.

Mark Stiving

Nice. Alright, So last thing, last question for you. What’s the one piece of pricing advice that you would give our listeners that you think could have a big impact on their business?

Dor Sasson

I think most of the founders I’m meeting on a daily basis are surprisingly refraining from asking their customers about their willingness to pay. And it’s amazing to see so many talented founders with amazing experience and knowledge just not getting to the point that they’re talking to their customers about their willingness to pay and their value perception.

And if there’s one thing that I can tell – and it’s funny that I’m building software about pricing, but I’m giving an advice that is completely unrelated to software – and you know, it’s all about people. So, if there’s one advice that I can give is talk to your customers, ask them about their willingness to pay. There are amazing frameworks out there for how to ask the right questions. It will unlock immense, deep understanding of how your customers think about your pricing and will really help you to nail down your own pricing strategy.

Talk to your customers is my best advice for now.

Mark Stiving

I love that answer, and I always tell my clients, “Look, we got to go talk to some customers” or “we got to go listen to customers and hear what they say”. Because I think most people don’t; they don’t hear that. So, fabulous job. Thank you, Dor.

And by the way, thank you for your time today. If anybody wants to contact you, how can they do that?

Dor Sasson

I think the best way is LinkedIn. I actually from time to time, review my DM’s and I try to be quick about my replies. So, LinkedIn, I guess, will be the best way to go.

Mark Stiving

Alright. And your name will be spelled properly, hopefully, in the show notes so people can get that.

Episode 193 is all done. Thank you so much for listening. If you enjoyed this, would you please leave us a rating and a review? The easiest way to do that is to go to ratethispodcast.com/impactpricing. That was ratethispodcast.com/impactpricing.

And Dave H left us a very short and sweet review on Apple Podcasts. He said:

“Criminally underrated. Enough said.”

Thank you, Dave. I hugely appreciate it.

And finally, if you have any questions or comments about the podcast or pricing in general, feel free to email me: mark@impactpricing.com.

Now, go make an impact.

 

Tags: Accelerate Your Subscription Business, ask a pricing expert, pricing metrics, pricing strategy

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