Value Based Pricing: How To Use a Pricing Axis To Grow Your SaaS Company’s Revenue | Dan Martell

(upbeat music) – Using pricing access to grow your SaaS company In today's video I'm gonna answer the questions how do you increase your revenue? If you've gotta a SaaS company, you're wondering how do you capture more value for the value created, how do you deploy deeper into the organization so that you can increase your lock-in? And all of those come down to different pricing axis

You know recently Brian Halligan, the cofounder and CEO of HubSpot, one of the latest SaaS companies to go public and just totally kill it Incredible company, big fan of Dharmesh and all the people that work at HubSpot, and he wrote a great blog post about startup to scale-up, and he shared the whole story of HubSpot, and in one section that I just thought so fascinating was the argument that all great SaaS companies that have been able to scale their businesses, they've had multiple pricing axis That means they have multiple ways to generate revenue from their customer, and what Brian notices in HubSpot, they only had two And the average company at scale has four to five So what I wanna share with you guys is the four that I think all of you out there that are building SaaS companies can implement to really get the most value from the customer

The first one is plans, right, which pretty much every startup SAAS company has plans, right? Most of them have three tiers, you know, they have a high priced plan, they try to get people to subscribe at the mid-tier and some of you at the enterprise level might even have a fourth plan that's kinda like click here to kind of have us contact you for a special quote, because that's for these big companies that might have needs around security and support and service level agreements Whatever it is, that's like your really high-end price point, so the first level of the first axis is just plans, right? Have you optimized those plans to really capture the most value from your potential customers? The second one is number of seats, you know, how many customers, accounts, users can use the product And having those fixed in your plan so that if they need more that's another way for you to up-sell and increase the revenue by selling them more seats to their product So that is a no-brainer, a lot of companies do that The third one is add-ons, right? So think about your product

Is there any enhancements that you could make around the usage, the data, the workflow, that it's either something you've built internally that's an add-on, or it's something a partner's built that you can sell on their behalf, and create a partnership there to do rev-share Whatever it is it's an add-on that enhances the core product That is the third area or pricing access that every SAAS company really needs to investigate to increase that revenue And then the fourth one is other services, you know? And the gold standard for this in my world in the SAAS world especially is Salesforce, right? You think of Salesforce, they're the world's best SAAS company and their core is a CRM, but they have several other divisions from social to support to marketing, and these different clouds they call them are other services that you can add on And what's great about it is if you can get a customer buying your core product, in Salesforce case it's a CRM, and then buying another marketing component, or buying the support cloud as well, you're gonna increase their adoption of your technology

All the interfaces are similar, the integration is similar, and you're gonna get better lock-in for your customers before they decide to make switch to another product So having other services, and if you don't have 'em here's a really great opportunity for you to look at other partners that might have solutions that you can partner with and add them to your add-on services for your sales people to really create the most value for your customer This is really thinking strategically about where is the value that we could create Enhance that value, create more value for your customer than anybody else on the planet and you're gonna win So here's a real quick recap

You gotta ensure that you have the right pricing structure around your plan, the right number of plans the average is three, if you wanna go four for that high-end one, the number of seats that you allow per plan and then up-selling the number of seats is another pricing access Add-ons, so what are enhancements and features to the product For example, I know a lot of email solutions out there, one of their add-ons is to provide social data on top of those email addresses or CRM tool That's a great example of an add-on that they can charge per email or per batch of emails

So that's a great add-on And then the fourth is other services What other products do you have in your company that you can sell as part of your core, or partner with other companies that offer that Create that partnership If you wanna receive more videos, exclusive invites to events and whatnot, subscribe to my newsletter

I'm real excited to have you here Be sure to subscribe to this channel to get more information about building your startup and as per usual, I wanna challenge you to live a bigger life, and a bigger business I'll see you next Monday