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Good vs. Great Pricing

Pricing is and will be one of the biggest growth levers of your business.

The best pricing models tie higher price points to the metric that accurately represents the customer receiving more value.

Pricing connected to functionality does this to a certain degree. However, the best pricing models tie to a metric that scale with usage / value.

Some examples of the right metrics:

Hubspot: # of contacts
Patreon: $ earned from Patrons
Slack: # of team members

Models not tied directly to the success of customers inevitably have to increase price over time to capture "expansion". E.g. This is why Netflix has had to increase its price so many times.

The right metric ties the company's success to the customer's.

That's how you land + expand and ramp up expansion revenue from your customer base. It is also how you get to higher satisfaction and negative churn.

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