CEO at ProfitWell
Patrick Campbell is the CEO of ProfitWell (formerly Price Intelligently), the software for helping subscription companies with their monetization and retention strategies.
ProfitWell also provides free turnkey subscription financial metrics for over eight thousand companies. Prior to ProfitWell, Patrick lead Strategic Initiatives for Boston based Gemvara and was an Economist at Google and the US Intelligence community.
Tactic that has had the biggest impact on Patrick’s success
All things pricing strategy
Result if you follow the steps in Patrick’s session
Understand how to do value based pricing
Full session with video, notes, audio and discussion inside EHQ Club. Learn more
Expert session snapshot
Yeah, this is somewhat tactic. This is tactic but I think it’s a little bit, it’s less like, you know, and your prices and nines, you know, which is not a good tactic. So that’s one thing I can comment on that. But the tactic that I would say is do something right.
A lot of us look at pricing, and even though some of the things I said you’re probably looking at it or listening to it and going, oh my gosh, that sounds like way too much work. And in actuality, it’s not that it’s a lot of work, it’s just a process and just start with something.
And so what I suggest doing is, especially if you’re earlier, just go through that first step of putting the stuff in a spreadsheet, it requires an hour of time, you can do it over lunch, when you can argue with your team about what’s right, what’s wrong, etc. Because everyone’s got an opinion on like the levels and things like that. But just spend that hour. And I think that that’ll help a lot.
And what we found is that questions or answers, but get more questions. So all of a sudden, you’re going to put that in there and you’re going to find out that you all disagree on this one particular point. Well, then that’s the next thing to research. Let’s go get some data or let’s at least like ask some congress to have conversations with customers to figure it out.
And so basically, what I’m trying to say is like start small and recognize that this is a process.
I think too many of us would not want to pricing but a ton of stuff in our businesses. We approach it as it’s like, monumental project, when in reality, if you approach it as a monumental project, your chance of failure is really high. Because you’re going to get bored, the data is going to be wrong, it’s going to take you 12 months to change anything. And by that time, all of a sudden, the data is going to be wrong.
And so start with something small. And for early stage company, just doing the buyer personas, and then maybe trying to quantify through some of the methods, that’s what we can link in the show notes. That’s the type of stuff that I would start with.
If you’re later stage, you definitely need like, at least 20% of someone if not a whole full time person dedicated to this stuff. But yeah, that’s kind of how I would crank things forward.
And how are we measuring the results and seeing if it’s actually a success?
Yeah, that’s a great question. So it depends on your stage. Right. So I think that and it depends on what you’re trying to solve.
So for most businesses, the measure of success for pricing is probably going to be around some sort of ARPU or average revenue per account or user metric. So basically, I’m expanding the amount of revenue I’m getting per account either by going after larger accounts, by getting those customers to pay more by getting more people to come in.
But in some cases, depending on the pricing problem that you’re attacking, there might be a retention metric, or there might be an acquisition metric.
So for me, I mean us, at ProfitWell, we look at, we have multiple different products. But for our pure kind of software, SaaS products, we essentially look at pricings influence on expansion, revenue, and ARPA.
So basically, we want to constantly be increasing our average revenue per user both through getting better kind of variation of accounts, but also by getting you know more and more expansion revenue by using a value metric.
So one of our products it’s called retain it helps with companies in lowering their churn automatically. So you just plug it into your billing system and it lowers your churn through a bunch of different funds from products and tactics. But what we do is we charge based on the amount of revenue that we recover.
So we have some people that come in, and they’re paying us very little. But as they grow, and as we continue to help them more and more, those accounts expand. And then we’ll also have maybe a large account come in, and they’re paying us a lot more because we’re covering a lot more for them.
And so that’s a good example of like that value metric and focusing on ARPU, and then ARPA, and making sure that it expands, but depending on what you’re trying to solve, it might come around to retention or some of the other metrics as well.
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