Maura Ginty is a marketing executive with deep expertise in content strategy, data-informed marketing, and demand generation. Most recently she worked as the Vice President of Marketing at Kissmetrics before becoming Interim CMO of One2Team. Ginty also lends expertise at CloudKettle as the Enterprise Marketing Practice Lead. You can find her on LinkedIn here.
Recently, I sat down with Maura to talk about lead qualification and how to validate pricing for B2B SaaS companies.
At Kissmetrics, how did you revamp the lead qualification process to increase the sales close rate?
At Kissmetrics, we realized that we needed clients who aspired to be cutting edge in web analytics, all the way through a shopping cart, SaaS product, or marketplace. We also knew we needed to go after clients who really knew how to operate a marketing tech stack.
So, we looked at the technology stack. We knew that the average tech stack was around 9+ technology tools. Kissmetrics, at the time, had something like 23+.
We also looked at triggers like; where they had high spend, where they were looking for optimization, and where they had integrations. We had this whole table set up and it worked better than predictive analytics to say, “This is their tech stack. We need to get them over to sales right now.”
Using this lead qualification methodology, we were able to increase our close rate from around 23% to 43%.
Why do you think this approach worked better than predictive analytics?
Knowing what their tech stack looked like meant we could have a different conversation with them about how they were set up, what systems they could use and the deductive information they could get out of analytics.
We found when it came to qualifying companies, pairing predictive and behavioral analytics with looking at their tech stack, and looking at their needs, worked best.
How do you build a pricing model and how do you validate you’re charging enough?
It’s funny because I feel like there’s a really different emotional component that people bring to pricing that they don’t bring to other decisions. People don’t have the same stress about doubling their demandgen budget that they have about changing their pricing. It’s a little bit of an emotional conversation but mostly it’s completing the checks and balances, looking at the ROI etc. With pricing, it’s an emotional conversation because the reference point seems so risky.
The key to getting pricing right is, you have to look at it from how the customer values the product.
And whose job is it to figure out what customers value? Marketing. You can’t do pricing well without marketing, but most people try.
So, how do you determine what the customer values?
At Kissmetrics I did a research project to really understand, what does the customer value? What features are important? What’s the competitive landscape?
I worked with some great researchers on this. We wanted a third party to look at all the data objectively and talk with our customers independently.
And it was very cathartic for a lot of customers, but it also turned into really understanding what they valued and what they were paying for.
Based on the overall results, how did you shift the pricing model?
We moved from a commodity based structure to really looking at the value our plans delivered for our customers. For example, licenses, triggers, events or visits can all be commoditized. But, if everything you do hinges on something that’s a value utility, it’s just a matter of time before someone comes and disrupts that.
So you have to look at these things from the perspective of, what’s the market value of these things? How do they work within the business context of your customer?
Not just any customer – your target customer. Not the person whose most willing to talk to you but the person who you’re most likely to sell to.
I worked closely with Sales and we did a bunch of design testing to make sure that the metaphor wasn’t overly complex. We divided things out into plans and charged based on utility/value added and then tested that the consumer understood the pricing framework.
Is this approach to pricing applicable across industries?
Yes, definitely. At GeoEx, which is very different than SaaS, we had a similar approach. We looked at, what our competitors were doing, what their trips were like, and did they offer something similar to us.
For example, we had a trip to Burma. Originally, it was one of the first in the market, so it’d been priced high because no other companies offered it. Then when the market opened up, we had to revisit pricing. The reality was, it was no longer unique access to those areas, to those hotels, to that tour etc.
We looked at the pricing and tried to figure out how to rework the itinerary or re-work the price by negotiating with partners. So the model itself can be applied across industries.
How do you reassure your Sales team during a pricing revamp?
With all the emotion around pricing, there are a lot of people who feel they own it. Sales rightly feels they’re going to be most directly hit by pricing changes.
At Kissmetrics, we had done 6 months worth of testing with the pricing page to show the Sales team; all the little changes that we made were increasing results by 20% to 50%.
What’s your Mantra on Pricing?
The week that I was rolling out the new pricing model, Andreesen Horowitz did an interview and they asked him, “What is the one piece of advice that you would give to software companies right now?” And he said, “I have three words – raise your prices.”
I’ve never been so happy that an article came out the same week that I was doing a major project.
If you liked what Maura had to say, checkout Bridge & Maeve to find out more about how Maura helps companies like One2Team and CloudKettle thrive.