In a recent episode of Sales Pipeline Radio, I had the opportunity to sit down with Matt Heinz and unpack the complexities of pricing in B2B product management and marketing. We ventured into some common myths, scrutinized the drawbacks of using B2C pricing models in B2B scenarios, and weighed the pros and cons of free trials versus freemium models. A focal point of our conversation was the necessity of tailoring pricing strategies to the target market, as well as the critical, yet often overlooked, aspect of pricing fairness.
Our conversation naturally led us to question some widely accepted practices and underscore the importance of incorporating customer feedback into pricing decisions. Tune in for a refreshing perspective on pricing strategies and their pivotal role in determining B2B success.
Key topics we covered in this episode:
- Importance of pricing in B2B marketing
- Difference between product and service pricing
- Need for value-based pricing, selling, customer success, and messaging
- Importance of considering pricing and packaging from day one of product development
- Use of free trials instead of freemium in B2B context
- Importance of aligning pricing strategies with B2B context
- Definition and influence of fairness in pricing
Timestamped Outline
04:01 Importance of pricing conversation and timing.
07:49 Pricing guidance needed for effective sales strategy.
20:02 Focus on pricing and market before launching.
26:57 Misconceptions around freemium in B2B software.
31:54 Fair pricing, tradition, discounts, Reddit pricing revolt.
Potent Quotables
Sales Enablement and Pricing Strategy:
“We should not be leaving pricing to the end salesperson. Unless it’s a true organizational mandate held on high that we’re gonna support everything we do with a value-based mindset, they’re gonna have sales teams out there on their own.”
— Dan Balcauski
The Misconception of Using Freemium in B2B:
“Anyone says freemium, almost universally, the better answer is free trial.”
— Dan Balcauski
Frontloading the Pricing Conversation:
‘Let’s start with pricing as a way to help determine what we should build in the first place. It should have been there from day 1.'”
— Dan Balcauski
The Importance of Voice and Choice in Social Fairness:
“If you give your customers, right, the ability to give their voice, give their opinion about an upcoming change, then they’re much more likely to accept it even if their end result ends up not being perceived as fair.”
— Dan Balcauski