Ryan Glushkoff – Why Subscriptions are the Future of B2B: Why & How to Take Advantage

Why you have to check out today’s podcast:  Find out how subscription-based pricing works for software B2B companies  Discover the metrics and criteria you need to track your SaaS subscription business   Know the pros and cons of feature-based pricing model for SaaS  Ryan Glushkoff founded Fraction8, a consulting firm focused on delivering pricing and product marketing expertise for business to business (B2B) software companies.  He worked in the software industry for a massive 20 years and has relevant experience in both pre-sales and post-sales for the mass-market and custom-enterprise type of software companies.  These opportunities gave him an advantage in understanding how SaaS (software as a service) companies need to position, price, and market themselves for success.  He was a student of Mark who took the first Price class in his Pragmatic Marketing course.  In this episode, Ryan shares the foundations of his career in pricing and his exposure in the B2B software market which paved the way of starting his consulting firm catering to the same market.  His insights into the evolution of pricing, risks in changing the pricing structure, and the concept of feature-based pricing model.   Get an in-depth explanation of the pricing metrics of subscriptions – the three essential criteria and the process of identifying the appropriate metrics for customers.   “Talk to your market, whether that be your customers, your prospects, your churn customers or your white space prospects that you’ve never spoken with before in your town. Get out there and talk to them because there is no substitute for hearing from them firsthand.” – Ryan Glushkoff   Stay updated on all thing pricing. Subscribe to ‘The Pricing Perspective’ here     Topics Covered:    01:35 – Ryan’s core beliefs in pricing and how his pricing career started  02:15 – Working at Disney where he was first exposed in pricing and where he met his wife  03:01 – His experience in B2B software providers in a marketing capacity and eventually starting his own company  04:07 – Focusing his market on software subscriptions in B2B companies  05:53 – How Disney figure out how to offer their packages to families with the B2C approach  07:20 – Subscription pricing vs. normal pricing   08:36 – Defining the concept of metrics in software subscription  10:07 – Three (3) important criteria of pricing metrics: Alignment with business, easy to understand,and scalability  11:54 – Walking through the process of identifying the right pricing metrics for customers: brainstorming, surveying the market, segmentation, and pricing  evaluation   15:59 – Ryan’s thoughts on pricing evolution and his advice on that   19:13 – Why companies need to be cautious when updating their pricing structure   22:43 – The strategy of raising prices with new customers and the risks involved  24:20 – Two (2) important pricing advice to the audience: Get out there and talk to your customers and choose a pricing metric that is not feature-based.  26:23 – Citing an example of a feature-based pricing metric    Key Takeaways:  “One of my core beliefs is that pricing is a blend of art and science together. You got to be good with numbers of course because it is pricing after all, but you have to also be very good at discerning behavioral patterns that you are not easily visible in the market.”– Ryan Glushkoff  “Subscription pricing means that you as the buyer agree to pay a fee in perpetuity or at least until the end of your contract term in exchange for a product or services that are rendered to you.  (While) Non-Subscription pricing means that you're obligated to pay only once, or at least according to the payment terms of your contract.”– Ryan Glushkoff  “How the customer pays do not necessarily have to align with the value derived. Although I would submit to you that it works out better economically for the vendor if the pricing is aligned to the value created by the product per surface. And that's the whole value metric side and software subscription.”– Ryan Glushkoff  “You have to be careful with customers though because a paying customer is better than a churned customer even if they aren't as profitable as you'd like them to be.” – Ryan Glushkoff    Resources Mentioned:  Monetizing Innovation: How Smart Companies Design the Product Around the Price    Connect with Ryan Glushkoff:  fraction8.io  LinkedIn  Twitter    Connect with Mark Stiving Email: [email protected]  LinkedIn  Twitter