Pricing Metric ~ Decision Guide
Efficiently evaluate options + confirm your existing approach.
What is a Pricing Metric ?
In simple terms, when a metric (unit-of-measure) changes ... your customer either pays you more or pays you less.
e.g., users, calendars, bandwidth, storage, files, contacts, tags, simulations, projects, identities, latency, retention days, etc.
Do you have a different definition for Value Metrics or Pricing Metrics?
Are Pricing Metrics the same as Value Metrics ?
PricingWire believes there is an important distinction between a pricing metric and a value metric.
Not all value metrics - should be used as pricing metrics.
Meaning, you may be able to make a convincing and credible case that something represents / demonstrates value customers care about ... but that does not by-default mean it should be used to determine when customers pay you more or pay you less.
Understanding relevant value metrics and selecting the pricing metrics most likely to perform best, will be critical to the revenue growth, valuation and sustainability of your software, SaaS or technology business.
What are the TOP 5 Signs of the WRONG Pricing Metric ?
#1 Low Conversion - Close - Win Rate
#2 Increasing / Long Sales Cycle + High CAC
#3 Decreasing or Low ACV / ARPC Expansion
#4 Decreasing or Weak Retention / High Churn
#5 Decreasing or Low Customer Lifetime Value (CLV)
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Pricing Metric ~ Decision Guide
Heads-Up:
These are Excel files, but easy to open in Google Sheets.
These are Excel files, but easy to open in Google Sheets.
Need Help?
After an initial-first-pass ... book a Strategy Session to review and fine-tune together.
Scroll-Down for Quick Tips
After an initial-first-pass ... book a Strategy Session to review and fine-tune together.
Scroll-Down for Quick Tips
Quick Tips
TIP #1
How many metrics can be evaluated ?
There is room to evaluate ten (10) pricing metrics, however open-up-your-mind to as many different options that seem worth considering.
List these other options below #10, so you can come back to them and not miss-out on their potential to perform.
TIP #2
How should I think about scoring ?
Here is how you and your team should think about scoring ...
3 - Strongly Agree
You can make a convincing case for this specific metric to meet Criteria Description and give real-world examples.
1 - Somewhat Agree
You can make a case for this specific metric to meet Criteria Description, however you either (a) struggle to give concrete examples or (b) it may vary due to differences or nuances across personas, segments or use cases.
0 - Do Not Agree
Quite simply, the specific Criteria Description does not apply to the specific metric being evaluated and you can give convincing reasons why.
TIP #3
Can I score using decimals, 2's or 4's ?
Do not use decimals and stick to the 3-1-0 scoring for each metric per criteria.
This is intentional and will best help you differentiate the feasibility and quality [potential] of each metric you are considering.
TIP #4
How should I approach using the guide ?
Here are the four (4) most common ways to use the Pricing Metric ~ Decision Guide ...
Approach #1
By Yourself - Then to Team
You simply use it by yourself and then review your responses / scoring with key team-members.
Approach #2
Begin in a Team Session
You gather key team-members and work through the guide together.
Approach #3
Individually by Team Members - Then Discuss + Compare as a Team
Often the most productive approach is to populate with Pricing Metrics, then distribute for key team-members to score individually first.
Then gather as a team to compare, discuss and fine-tune.
Approach #4
Either of the Above - Then Book a Strategy Session
Whichever approach you choose above, booking a Strategy Session with PricingWire will help you gain additional perspective, avoid unnecessary challenges, prevent costly regrets and identify new opportunities.
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100% of your Revenue ... comes from your Pricing Decisions
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