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How to Scale Sales with Pricing | Jon Rydberg (Align Advisory Group)
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Are freemium models confusing your customers and costing you sales? Find out why Jon Rydberg advocates for guided paid trials over freemium models and how this strategy can significantly boost your software's success.
In our insightful conversation, Jon, the Founder and Principal of Align Advisory Group, takes us through his fascinating journey from VP of Sales to becoming an independent consultant. We dive deep into the complexities of pricing strategies, the pitfalls of multiple pricing tiers, and how educating customers about price increases can significantly impact win rates. We then shift our focus to the critical choice between freemium and trial-based models, especially for complex, enterprise-grade software platforms. Jon and I dissect the challenges of implementing a freemium model that requires extensive configuration and support, ultimately finding that guided paid trials were a more effective solution. We also discuss the importance of collecting feedback to adjust pricing strategies, ensuring they are well-aligned with the support and infrastructure available for SMBs.
In our final segment, we explore effective pricing strategies for sales success, with a spotlight on value-based pricing for pilot programs. John shares practical tips on setting appropriate pilot fees, covering costs, and offering pilot fee credits towards future contracts to enhance conversion rates. We also touch on the future of pricing and sales, emphasizing the role of transparency in pricing to attract more educated and qualified leads, saving time and reducing frustration. Tune in for a comprehensive guide on mastering the art of pricing in the B2B SaaS landscape!
In this episode:
(00:00) Jon Rydberg discusses his transition from VP of Sales to pricing expert. He highlights the challenges of aligning enterprise pricing with an SMB target audience.
(11:20) The Path From Freemium to Trials - the strategic decision-making process between freemium and trial models. Jon shares insights on why guided paid trials are more effective for complex software platforms.
(15:22) Jon elaborates on value-based pricing for pilot programs, focusing on cost coverage and client commitment. He provides practical tips to enhance conversion rates and secure multi-year deals.
(22:28) The conversation shifts to the importance of transparency in pricing for enterprise sales. Jon and Marcos discuss how transparent pricing can lead to better-qualified leads and streamlined sales processes.
(27:23) A real-world example of a pricing model that hindered sales efforts, and the need for tailored, transparent pricing strategies to avoid such pitfalls.
(31:40) How AI will impact future pricing models. Despite AI's capabilities, Jon asserts that human elements remain crucial for customer interactions and relationship-building.
(34:52) Favorite jam growing up
Welcome to Street Pricing, the only show where proven SaaS (Software as a Service) leaders share their mindset and mistakes in pricing so we can all stop guessing and start growing. Street Pricing is hosted by Pricing I/O CEO and Pricing Coach, Marcos Rivera, sought after slayer of bad pricing. With 20 years of pricing expertise, he has helped price over 200 SaaS products and coached over 100 SaaS CEOs and counting! From the streets of the Bronx to CEO, Marcos wants to take the guessing out of pricing.
Resources:
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