The past 10 years I made companies $2.4 billion by fixing one piece of their business:

Thread by Patrick Campbell@Patticus · Aug 7, 2023 · 15 posts · 707 words · 5 min read

The past 10 years I made companies $2.4 billion by fixing one piece of their business: Their pricing. Why'd they need me? Because even the smartest people don't know how their pricing strategy should change over time. So here's the exact pricing path to follow for growth 👇
1/15View on X
At the start, your product is "basic", but you're excited to ship it! Except - you forgot a price. So you scramble. You say "it needs to be simple like [famous startup] did, right?" So you guess a price (and end it in a 9, because 🤷‍♂️). But then something weird happens... 👇
2/15View on X
You get sales, but some say you're cheap. Others say expensive. This means you're losing money. But then you read an HBR article. They mention "Good Better Best". So you add a cheap offer. And a premium one. You're clever - so you add "contact us". WalMart may want to buy!
3/15View on X
You get more sales and realize: Your price is an exchange rate for your offer's value. Different customers get varying value. Therefore: Different customers need varying prices. Many offers. Many tiers. Many products. But this is where the arguments start 👇
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You finally hired super smart people. But every time you talk pricing, it's constant objections. "if you change X, I'll miss my goal" "It needs to be simple!" So you do nothing. For *years*. Most stop here, but pricing nags at you. That "simple" argument feels off... 👇
5/15View on X
Simple is the wrong pricing goal. The right one: Elegantly match right customer to right price. But how without confusing customers or sales? What if customers gave you info and THEN you showed them a price? That's a pricing engine. But how do you sell it internally 👇
6/15View on X
You know your team's scared of pricing. So you start small. You show them your pricing engine (read: spreadsheet). You just want to add more offers. But they're "shadow offers" - they only show up for the right customer. They cautiously agree. But then comes chaos 👇
7/15View on X
The new offers work. But it's bumpy. Sales whines. Marketing's dazed. Product emotes. But you show them the revenue increase. And launch a secret weapon - a pricing committee of key decision-makers. It smooths out the kinks. But then you suggest a price increase 👇
8/15View on X
Your team freaks when you pitch raising prices. It's scary. But you collect data. It justifies it. Your comms plan is also great (see below). Some customers bristle, but revenue jumps. That wasn't bad at all. But then you find an elegant way for constant price increases 👇
9/15View on X
If more offers = more money, then why not infinite offers? You just discovered "value metric"s You can charge on: - Usage - Consumption - Value received You implement one. Revenue booms. Execs say "this was my idea" Others say "I said this 2 years ago" But why does it work?
10/15View on X
Value metrics ensure everyone pays for the value they're getting. Big customers pay big prices. Small pay small ones. Most importantly: they EXPAND and pay more as they use more. With ZERO work from you. Revenue's cooking, but something weird happens internally 👇
11/15View on X
When pricing starts cranking, everyone wants to be involved. It's great. They support it. They see it as a way to get promoted. You shift from pushing people to holding them back. But now your pricing addicts want more and there's only so many options 👇
12/15View on X
You need more stuff to sell. A new product's hard, but what about add-ons? These are features you sell separately: - Priority support - Analytics - T-shirts High-growth companies have 15+ add-ons. Most are pure profit. So you ship some - but you need to optimize more👇
13/15View on X
You're about to expand globally - do customers differ in different locations? Yes, exactly. So you need to do "Price Localization". You need to personalize by location in this order: - Price point - Value propositions - Features and packaging It's a 15% revenue boost.
14/15View on X
And with that - your business would complete levels 1 to 10 of pricing. :) There are more levels, so let me know where to go deeper. Pricing's powerful. Take it seriously. You should also retweet the thread. It encourages me to do more :) https://x.com/Patticus/status/1688541007153942530
15/15View on X

The past 10 years I made companies $2.4 billion by fixing one piece of their business:

Thread by Patrick Campbell@Patticus · Aug 7, 2023 · 15 posts · 707 words · 5 min read

The past 10 years I made companies $2.4 billion by fixing one piece of their business: Their pricing. Why'd they need me? Because even the smartest people don't know how their pricing strategy should change over time. So here's the exact pricing path to follow for growth 👇
1/15View on X
At the start, your product is "basic", but you're excited to ship it! Except - you forgot a price. So you scramble. You say "it needs to be simple like [famous startup] did, right?" So you guess a price (and end it in a 9, because 🤷‍♂️). But then something weird happens... 👇
2/15View on X
You get sales, but some say you're cheap. Others say expensive. This means you're losing money. But then you read an HBR article. They mention "Good Better Best". So you add a cheap offer. And a premium one. You're clever - so you add "contact us". WalMart may want to buy!
3/15View on X
You get more sales and realize: Your price is an exchange rate for your offer's value. Different customers get varying value. Therefore: Different customers need varying prices. Many offers. Many tiers. Many products. But this is where the arguments start 👇
4/15View on X
You finally hired super smart people. But every time you talk pricing, it's constant objections. "if you change X, I'll miss my goal" "It needs to be simple!" So you do nothing. For *years*. Most stop here, but pricing nags at you. That "simple" argument feels off... 👇
5/15View on X
Simple is the wrong pricing goal. The right one: Elegantly match right customer to right price. But how without confusing customers or sales? What if customers gave you info and THEN you showed them a price? That's a pricing engine. But how do you sell it internally 👇
6/15View on X
You know your team's scared of pricing. So you start small. You show them your pricing engine (read: spreadsheet). You just want to add more offers. But they're "shadow offers" - they only show up for the right customer. They cautiously agree. But then comes chaos 👇
7/15View on X
The new offers work. But it's bumpy. Sales whines. Marketing's dazed. Product emotes. But you show them the revenue increase. And launch a secret weapon - a pricing committee of key decision-makers. It smooths out the kinks. But then you suggest a price increase 👇
8/15View on X
Your team freaks when you pitch raising prices. It's scary. But you collect data. It justifies it. Your comms plan is also great (see below). Some customers bristle, but revenue jumps. That wasn't bad at all. But then you find an elegant way for constant price increases 👇
9/15View on X
If more offers = more money, then why not infinite offers? You just discovered "value metric"s You can charge on: - Usage - Consumption - Value received You implement one. Revenue booms. Execs say "this was my idea" Others say "I said this 2 years ago" But why does it work?
10/15View on X
Value metrics ensure everyone pays for the value they're getting. Big customers pay big prices. Small pay small ones. Most importantly: they EXPAND and pay more as they use more. With ZERO work from you. Revenue's cooking, but something weird happens internally 👇
11/15View on X
When pricing starts cranking, everyone wants to be involved. It's great. They support it. They see it as a way to get promoted. You shift from pushing people to holding them back. But now your pricing addicts want more and there's only so many options 👇
12/15View on X
You need more stuff to sell. A new product's hard, but what about add-ons? These are features you sell separately: - Priority support - Analytics - T-shirts High-growth companies have 15+ add-ons. Most are pure profit. So you ship some - but you need to optimize more👇
13/15View on X
You're about to expand globally - do customers differ in different locations? Yes, exactly. So you need to do "Price Localization". You need to personalize by location in this order: - Price point - Value propositions - Features and packaging It's a 15% revenue boost.
14/15View on X
And with that - your business would complete levels 1 to 10 of pricing. :) There are more levels, so let me know where to go deeper. Pricing's powerful. Take it seriously. You should also retweet the thread. It encourages me to do more :) https://x.com/Patticus/status/1688541007153942530
15/15View on X

The past 10 years I made companies $2.4 billion by fixing one piece of their business:

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The past 10 years I made companies $2.4 billion by fixing one piece of their business:

Top replies from readers