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Jul 15, 2019

 Why you have to check out today’s podcast:

  • Learn the not-so-good strategies that companies do using subscription pricing
  • Know the pitfalls in subscription pricing
  • Discover what a pricing roadmap is and how is it related to big business decisions


Laura Fay is currently the VP Research & Advisory of XAAS Product Management for Technological Services Industry Association (TSIA) and founding member of Health Tech Capital.  Laura is a technology industry veteran with over 30 years of experience driving business growth in the enterprise software industry via leadership roles in product management, general management, product development, and customer success.

In this episode, Laura, who is a results-driven person and a very successful in driving enterprise software growth shares her perspectives about the role of pricing on subscription-type businesses and the relationship between pricing and product management.  She will also reveal the pitfalls that she found out in subscription pricing and how value metric and pricing metric are differentiated.



“If you’re going to build a pricing model based on your value proposition, you've got to understand at a deep level how the customer is getting value from the solution.” 

– Laura Fay


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Topics Covered: 

01:20 – Laura tells a brief background and the business model of TSIA

03:13 – Her role in TSIA

04:08 – How pricing fits with product management

05:13 – The role of pricing on subscription-type businesses

07:13 – Relationship of pricing and product management

08:38 – What companies don’t do well when it comes to subscription pricing

13:35 – Estimated percentage of businesses that will not transition to subscription pricing in the next five years

16:22 – Two pitfalls that Laura sees in subscription pricing

18:58 – The difference between value metric and pricing metric

23:06 – Two stages of the pitfall in timing when product management starts to think about pricing

26:18 – Pricing roadmap and what it means

27:49 – A piece of pricing advice which could impact the listeners’ business


Key Takeaways:


“Understanding the value proposition that's being delivered and getting into those level of detail of understanding the customer process, how they use the product so that you can start doing that alignment of value and pricing.  It's not something you can turn on a dime overnight once you suddenly decide to do it. So, having a point of view on that earlier in the game and evolving it is pretty critical.” – Laura Fay

“I know the timing thing is only thinking about pricing at the launch phase and not thinking about pricing during the product design, and the offer design phase because they are interdependent. You might choose to move things around and how you put your packages or your solutions together, how you put your product suite together and what features, functions and capabilities and use cases and value go into each element in the portfolio. And that's going to pose how you price it. But if you don't think about that until the very end, you're probably missing an opportunity.” – Laura Fay

“Product managers should be called value managers because ultimately, that's what their job is.  The promise of that value proposition is the promise of the product, and that is to put a value proposition that you're going to realize when you purchase whatever solution they're defining and building.”  – Laura Fay

“The remit of product management to understand how the customer is perceiving that value that they're creating and then leverage that in into their pricing design.” – Laura Fay


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