Ulrik Lehrskov-Schmidt, a global expert in B2B SaaS pricing and packaging, shares his journey and insights on pricing and packaging in the B2B SaaS industry. He emphasizes the importance of pricing and packaging as a lever for growth and the need for companies to work on it rather than settling for good enough.

Ulrik discusses common mistakes made by founders and CEOs, such as overcomplicating pricing and letting sales drive strategy. He also highlights the role of data in building a great pricing muscle and the need for a process to turn data into actionable insights. The conversation covers various topics related to pricing and monetization in B2B SaaS.

Fynn & Ulrik discuss the importance of solving for risk and reverse engineering pricing decisions. They also explore the limitations of feature-based analysis and the role of intuition in pricing. The conversation covers negotiation strategies, emphasizing the need for win-win outcomes and the importance of having a strong alternative. They also discuss the operational challenges of pricing and packaging in software, including the impact of commercial debt and complexity. They highlight the need to stop incurring new debt and clean up existing commercial debt to enable value creation.

Takeaways

- Pricing and packaging is a key lever for growth in the B2B SaaS industry.

- Many companies settle for good enough pricing and packaging instead of maximizing its potential.

- Common mistakes include overcomplicating pricing, letting sales drive it, and not working on pricing and packaging.

- Data is important, but companies should focus on having a process to turn data into actionable insights.

- Alignment between product and sales is crucial for effective pricing and packaging.

- A pricing committee, led by the CEO, can help ensure ongoing review and decision-making on pricing and packaging. Solve for risk and reverse engineer pricing decisions.

- Consider the limitations of feature-based analysis and the role of intuition in pricing.

- Negotiate for win-win outcomes and have a strong alternative.

- Stop incurring new commercial debt and clean up existing debt to enable value creation.

Sound Bites

"Pricing and packaging is almost as important as the product itself."

"Many companies settle for good enough pricing and packaging instead of maximizing its potential."

"The most common mistake is to not work on pricing and packaging."

"You sort of work backwards"

"It's often better to have avoided the feature level discovery because you've exited a conversation predicated on value and gotten yourself into a place that probably requires a lot of discounting because you're competing on features."

"The feature-based analysis that you sometimes do with Conjoint and MaxDiff and all this, the whole utility analysis on a feature level is largely academic."

Chapters

00:00 Introduction and Background

08:19 Key Learnings in Pricing and Packaging1

4:24 Common Mistakes in B2B SaaS Pricing and Packaging

19:15 The Role of Data in Pricing and Packaging

23:12 Ownership and Alignment in Pricing and Packaging

27:32 The Role of a Pricing Committee

34:32 Solving for Risk and Reverse Engineering Pricing Decisions

36:41 The Limitations of Feature-Based Analysis and the Role of Intuition in Pricing

42:37 Negotiating for Win-Win Outcomes and Having a Strong Alternative

52:11 The Challenges of Commercial Debt and Complexity in Pricing and Packaging

01:06:09 Changing the Pricing Model to Unlock Additional Value