Oct 19, 2020
Patrick Campbell is the CEO of ProfitWell (formerly Price Intelligently), the software for helping subscription companies with their monetization and retention strategies. ProfitWell also provides free turnkey subscription financial metrics for over eight thousand companies. Prior to ProfitWell, Patrick lead Strategic Initiatives for Boston based Gemvara and was an Economist at Google and the US Intelligence community.
In this episode, Patrick shares the importance of a pricing person or a pricing department to deal with the complexities of crafting pricing strategies to gain pricing leverage. He also discusses the Freemium model they use at Profit Well and how it is more of acquisition rather than a pricing model.
[powerpress]
Why you have to check out today’s podcast:
- Learn how the market is slowly going entirely towards subscription as it provides predictable expense to consumers and predictable revenue to companies
- Find out how to make Pricing and packaging powerfully work to capture value
- Learn how to gain pricing leverage by understanding the different value drivers necessary in capturing value
"Make sure you have a process. Make sure you have a pricing committee. Pricing is at the intersection of important and uncomfortable. And whenever you have that happen, those are things that get de-prioritized inside an organization constantly."
- Patrick Campbell
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Topics Covered:
01:56 - Patrick's remark to Mark's praise of him being a guru
02:13 - How he landed in Pricing
03:55 - What does he think about 'so many companies don't value pricing'
05:50 - Creating a Pricing department when there is already complexity in a company
06:58 - Why are companies not so keen on the important decisions around value and Pricing
09:06 - Explaining his model: acquire, monetize, and retain
10:51 - The use of pricing metrics and value metrics
13:08 - Is Uber a subscription company
17:46 - Talking about the guaranteed price in subscription
20:04 - Can you separate Pricing and packaging
21:21 - Understanding value capture in market segmentation
22:38 - The base free offer they give at Profit Well
24:38 - Patrick's thoughts on 'freemium is a customer acquisition model, not a pricing model
27:40 - Discussing about the three types of Freemium model
30:07 - His pricing advice that can have a big impact in others' business
31:42 - The need to have a committee to make progress
Key Takeaways:
"I think the evolution is going to go from one-time purchases to subscription purchases to recurring revenue businesses. And there's obviously transitions where everything goes back and forth, and things like that." - Patrick Campbell
"I would say that there are things you can do independent of Pricing or independent of each other with Pricing and packaging, that leads to essentially different optimizations. So, I think that you can work without each other. But there's a lot that they rely on with one another. So, it gets a little more complicated." - Patrick Campbell
"I don't think you're going to have pure dynamism anytime soon. But I think you'll start seeing segment-based Pricing sooner than later." - Patrick Campbell
"We chose the freemium round, for a lot of reasons, basically, it's an acquisition model. It's not a pricing model." - Patrick Campbell
"I think that the big thing you have to think about with freemium is it's opening the top of the funnel, so if it is up of the funnel, it is something that will influence your Pricing. But it's not part of your Pricing strategies core." - Patrick Campbell
"It's been successful because we get two effects that come from Freemium. One, there's a network effect because every time we get more data, it goes into our algorithms of our pricing or retention products. And these are just things that makes them better. But the other thing it does is, it lowers our CAC, or customer acquisition cost quite significantly." - Patrick Campbell
Connect with Patrick Campbell:
Connect with Mark Stiving:
- Email: mark@impactpricing.com