The Keys to Pricing Subscriptions with Patrick Campbell

Patrick Campbell is the CEO of ProfitWell (formerly Price Intelligently), the software for helping subscription companies with their monetization and retention strategies. ProfitWell also provides free turnkey subscription financial metrics for over eight thousand companies. Prior to ProfitWell, Patrick lead Strategic Initiatives for Boston based Gemvara and was an Economist at Google and the US Intelligence community.   In this episode, Patrick shares the importance of a pricing person or a pricing department to deal with the complexities of crafting pricing strategies to gain pricing leverage. He also discusses the Freemium model they use at Profit Well and how it is more of acquisition rather than a pricing model. [powerpress]  Why you have to check out today’s podcast: Learn how the market is slowly going entirely towards subscription as it provides predictable expense to consumers and predictable revenue to companies  Find out how to make Pricing and packaging powerfully work to capture value  Learn how to gain pricing leverage by understanding the different value drivers necessary in capturing value    "Make sure you have a process. Make sure you have a pricing committee. Pricing is at the intersection of important and uncomfortable. And whenever you have that happen, those are things that get de-prioritized inside an organization constantly."   - Patrick Campbell   Increase Your Pricing Knowledge: Become a Champions of Value INSIDER! To sign up go to insider.championsofvalue.com   Topics Covered: 01:56 - Patrick's remark to Mark's praise of him being a guru  02:13 - How he landed in Pricing  03:55 - What does he think about 'so many companies don't value pricing'  05:50 - Creating a Pricing department when there is already complexity in a company  06:58 - Why are companies not so keen on the important decisions around value and Pricing  09:06 - Explaining his model: acquire, monetize, and retain  10:51 - The use of pricing metrics and value metrics  13:08 - Is Uber a subscription company  17:46 - Talking about the guaranteed price in subscription  20:04 - Can you separate Pricing and packaging   21:21 - Understanding value capture in market segmentation  22:38 - The base free offer they give at Profit Well  24:38 - Patrick's thoughts on 'freemium is a customer acquisition model, not a pricing model  27:40 - Discussing about the three types of Freemium model  30:07 - His pricing advice that can have a big impact in others' business  31:42 - The need to have a committee to make progress   Key Takeaways: "I think the evolution is going to go from one-time purchases to subscription purchases to recurring revenue businesses. And there's obviously transitions where everything goes back and forth, and things like that." - Patrick Campbell  "I would say that there are things you can do independent of Pricing or independent of each other with Pricing and packaging, that leads to essentially different optimizations. So, I think that you can work without each other. But there's a lot that they rely on with one another. So, it gets a little more complicated." - Patrick Campbell  "I don't think you're going to have pure dynamism anytime soon. But I think you'll start seeing segment-based Pricing sooner than later." - Patrick Campbell  "We chose the freemium round, for a lot of reasons, basically, it's an acquisition model. It's not a pricing model." - Patrick Campbell  "I think that the big thing you have to think about with freemium is it's opening the top of the funnel, so if it is up of the funnel, it is something that will influence your Pricing. But it's not part of your Pricing strategies core." - Patrick Campbell  "It's been successful because we get two effects that come from Freemium. One, there's a network effect because every time we get more data, it goes into our algorithms of our pricing or retention products. And these are just things that makes them better. But the other thing it does is, it lowers our CAC, or customer acquisition cost quite significantly." - Patrick Campbell   Connect with Patrick Campbell: LinkedIn    Connect with Mark Stiving:    Email: [email protected] LinkedIn