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
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1. The complex portfolio structure was made up of 7 solution areas and 40+ individual solutions
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2. Each solution was sold individually with some configuration prerequisites and bundles
Future state
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1. A new pricing strategy to transform the a-la-carte product suite into a unified platform
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2. A new unified pricing metric that scales both horizontally – across solution domains, and vertically – across other business units and subaccounts
Problem
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1. The primary pricing metric did not work for pricing most high-value digital enterprises ​with few employees
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2. There were no mechanisms to price higher-value solutions at a higher price
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3. The process broke when pricing horizontal account expansions such as mergers and acquisitions
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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
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5. The SaaS model presented new challenges in sales, sales ops, biz ops, and account management which required significant alignment for SaaS delivery
Insight
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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
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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
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3. Each solution area can be reconfigured into a common benefits architecture which allows for justifying higher price for higher-value solutions
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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
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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
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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