Every company wants to make money; that’s the way business works. You need enough to keep doing what you’re doing, and if you can turn a profit, you can grow. Growth typically involves enhancing the company’s product and service offerings. All too often, though, companies fail to evolve their pricing alongside all their other enhancements. Such was the case with Continuum, an IT management platform for managed service providers.
“We had 55 consecutive monthly releases and absolutely no price increase. The product is exponentially better, but we still offered the same price,” said Jeanne Hopkins, senior vice president and chief marketing officer at Continuum.
Getting The Right Research
Jeanne and her team knew that they couldn’t up the pricing willy-nilly, though. After all, marketing teams will spend an entire year discussing a website update, but “the average SaaS company, in the course of their business, spends a grand total of six hours on a pricing strategy,” said Jeanne.
“Plus, pricing is maybe the biggest and most easily messed up lever on revenue,” added Sean Butler, senior product manager at Continuum. “You can also price things to a point where no one's interested—like it's a non starter from the beginning of the conversation.”
The Continuum crew wanted to give their pricing initiative the same attention they give every other project. That meant big-time research. “Research is very important for the company,” said Lisa Crowell, senior director of marketing. “Trying to uncover trends and triggers—it really gives you the answer and the road map for your strategy.”
Conducting research leads to better decision-making, which ensures further success. “When it comes down to it, innovation is expensive and everything that you can do to mitigate risk—getting out in the marketplace, doing the right research, understanding what the right fit in the market is—is critical to your success, not only as a product line but as a business,” said Sean. But it isn’t just about risk, explained Lisa: “If you don't do pricing research, you might put all the value in the lower end packages. Therefore, you're leaving money on the table.”
The marketing team needed research to inform pricing strategy, but they also needed it to convince internal stakeholders that a pricing increase was necessary: “I don't know of a salesperson on the planet that says, ‘Hey, marketing, let's increase the price,’" said Jeanne. So, the team enlisted experts. “People think they can do this on their own, and the reality is you can't. You need access to the market; you need algorithms and data insight,” said said Mary Crogan, head of product marketing.
Calling In The Pros
Fortunately, Jeanne had worked with Price Intelligently (PI) before at previous companies. (“Price Intelligently has done 100 projects for me over the course of the past four years.”) She loved how fast PI worked and how actionable their proposals were. Most importantly, though, she loved the data PI collected: “It wasn't opinion...It said, ‘We talked to this particular audience. We asked these particular questions. This is the range of what you can expect if you deploy this. This is the increased profitability that you can expect.’ That's a conversation that you can have with an executive team, with the board of directors, with a private equity company. Everybody can understand it when it's all data.”
So, when it came time to examine price at Continuum, there was no question for Jeanne: She called in PI.
Pricing is maybe the biggest and most easily messed up lever on revenue.
Experiencing The PI Difference
“Price Intelligently helps us in two ways,” said Mary. “One, by providing panels, so we can reach the prospect market and understand their point of view. Two, the intellectual property they bring to the table—the models, the algorithms, the approach that they take is really important to us, because it gives us insight into not only what the price point is, but what the likelihood to buy is. That's pretty critical.”
“In addition to helping us with the research,” added Sean. “Price Intelligently is really critical on providing additional bandwidth...Pricing is really hard...there's a lot of variables to go into it, and to be truthful, in order to do it well, it's a full time job for a couple of people at large companies. As a company that is on the smaller side of the enterprise, we simply don't have the resources, and going out and finding those resources is incredibly difficult.”
“I would also recommend them because of the time component,” said Jeanne. “As a marketing organization, we're moving faster and faster, and we need to strike while the iron is hot. I know that things can be deployed, turned around, and presented in a very fast time frame.”
Thanks to PI’s research, the Continuum team was able to “verify and actually change a key assumption in one of our market models, where we believed a product would only go so far down market,” said Sean. “The opportunity was bigger than we had anticipated, and that we had more of a product fit than we knew originally. It changed everything for us.”
Going Beyond Pricing
The pricing change was just the beginning of Continuum’s relationship with PI. They were so impressed that the Continuum marketing team has since employed PI for an array of research projects. “I've worked and partnered with Price Intelligently on numerous other projects, such as naming a new product, determining key messages for our launch, and understanding media consumption habits that would help make our marketing strategy decisions,” said Lisa. “We have them on retainer...Research projects or questions pop up all the time. We're able to just pick up the phone and jump start immediately.”
This partnership has proven fruitful. In fact, Jeanne said she’d pick PI over Continuum’s Google AdWords spend, because unlike PPC, a partnership with PI is an “investment, not an expense.” Lisa agrees: PI has “been instrumental in steering us in one direction or another and making us feel very confident in our business decision...I never felt like they were a vendor, but rather an extension of the Continuum organization.”
The best thing about Continuum’s partnership with PI, though, is that PI has been able to help Continuum adhere to its (and just about every business’s) primary goal: growth. “Increased pricing equals increased profitability, and increased profitability means increased ability to grow,” said Jeanne. “Price Intelligently helps fuel our growth. Enlisting them is a no brainer.”Back to Customer Stories