Case study: SaaS pricing
Enterprise SaaS product suite with 6 solution areas
Our client, a global digital security solutions provider to Fortune-100 enterprises aimed to modernize the delivery model of their product suite by adding a SaaS option and required a SaaS pricing plan to replace its perpetual licensing model.
Current state
1. The complex portfolio structure was made up of 7 solution areas and 40+ individual solutions
2. Each solution was sold individually with some configuration prerequisites and bundles
Future state
1. A new pricing strategy to transform the a-la-carte product suite into a unified platform
2. A new unified pricing metric that scales both horizontally – across solution domains, and vertically – across other business units and subaccounts
Problem
1. The primary pricing metric did not work for pricing most high-value digital enterprises with few employees
2. There were no mechanisms to price higher-value solutions at a higher price
3. The process broke when pricing horizontal account expansions such as mergers and acquisitions
4. Almost all customers bought solutions across all solution domains which made it difficult to implement a traditional multi-tiered SaaS structure without adding significant complexity
5. The SaaS model presented new challenges in sales, sales ops, biz ops, and account management which required significant alignment for SaaS delivery
Insight
1. The existing pricing metric is well established, differentiated, and scalable. It can be used as the pricing for the platform base where the add-on solutions can be priced using a value-based metric
2. New metrics must be added to further monetize high-value solutions. For example, there’s no reason for two companies of the same size - one with 50 integrations the other with 500 integrations - to be paying the same price
3. Each solution area can be reconfigured into a common benefits architecture which allows for justifying higher price for higher-value solutions
4. Platform pricing enables pricing individual solutions of similar value in similar ways even across the solution areas. Also, a consistent benefits architecture removes the complexity of pricing each solution individually
Break-through
We created a scalable platform base and a unified pricing architecture for each of the solution areas. We developed a detailed, cross functional implementation roadmap that coordinated the roll-out effort to new customers as well as a migration strategy of the existing customers over the next 2 years
Results
Our client implemented the new SaaS model in less than 4 months. In Phase 2, we mapped the new SaaS customer journey and benchmarked their marketing strategy against the best practices in SaaS. We also helped them develop a market facing tool for SaaS prospects to build their own solution and engage with the cloud offering at a much deeper level