In this Software Spotlight episode, Michael Bernzweig interviews Bill Wilson, CEO and founder of Pace Pricing, discussing the intricacies of pricing strategies in B2B SaaS. Bill shares his journey from software development to becoming a pricing expert, emphasizing the importance of aligning pricing with product-market fit and customer value. The conversation explores common pricing pitfalls, the significance of time to value, and the emotional aspects of pricing decisions. Bill also highlights the need for a balanced approach to pricing models, particularly in the evolving landscape influenced by AI. The episode concludes with insights into the typical challenges faced by founders and the revelations that can transform their pricing practices.
In this Software Spotlight episode, Michael Bernzweig of Software Oasis interviews Bill Wilson, CEO and founder of Pace Pricing, discussing the intricacies of pricing strategies in B2B SaaS. Bill shares his journey from software development to becoming a pricing expert, emphasizing the importance of aligning pricing with product-market fit and customer value. The conversation explores common pricing pitfalls, the significance of time to value, and the emotional aspects of pricing decisions. Bill also highlights the need for a balanced approach to pricing models, particularly in the evolving landscape influenced by AI. The episode concludes with insights into the typical challenges faced by founders and the revelations that can transform their pricing practices.
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Michael Bernzweig (00:01.715)
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I'd like to welcome everyone to this week's edition of the Software Spotlight. I'm Michael Bernzweig, your host and the founder of Software Oasis. Today we're joined live by Bill Wilson. He's the CEO and founder of Pace Pricing. So with that, Bill, welcome to the podcast.
Bill Wilson (00:21.141)
thank you so much. I'm super excited to be here.
Michael Bernzweig (00:23.505)
Yeah, same here. And I can tell from some of the questions that came in from the community that there are quite a few individuals sitting on their edge of their seat waiting to hear some of this conversation. So, but you know, for anyone that isn't familiar with either yourself or Pace Pricing, can you give us a little bit of your backstory getting to where you are and let us know a little bit of what's going on over there at Pace Pricing?
Bill Wilson (00:51.842)
Yeah, for sure. For me, it's a bit of a weird story. I never ever thought I would be a pricing expert ever in my life. I was always fascinated by pricing, but it was never something I thought I would actually make a career out of. I started off as a software developer. So I've been writing code since the early 90s. And I've worked for off-the-shelf software companies to big enterprise companies to military to the whole work stuff. So I've done a lot of software. But by 2007, I was really kind of getting tired of the enterprise software game.
And I wanted out. I was in charge of like a $20 million a year product for a big publicly traded company. And it was just, you know, a lot of bureaucracy. And I was, I was more interested in creating things than I was, you know, managing 40, 60 developers. So I started my first company. Now I had done a lot of mobile work at the time. I had built tons and tons of mobile apps for, you know, windows CE, you know, you and I both remember those days, windows CE, you know, Blackberry, all that kind of stuff.
Michael Bernzweig (01:47.166)
Sure.
Thank
Bill Wilson (01:50.55)
And so I started a company that was mostly focused on mobile and it was before it was cool. then, but within a couple of years of me struggling, the mobile market really took off. iPhone came on strong and you could build apps. And all of a sudden we were building apps for companies all over North America. And so I know how does this tie into pricing? So what happened was we built a tool internally to help us sell our productized service. So we sold services. We started off with this thing called the blueprint and
It was a sort of a good, better, best model. There was three versions, depending on what you really needed in the stage of your company. And so we built a tool that looked like a business-to-business software as a service pricing page. But the interesting thing was it was customized for each client. It was like a little web link I could send someone. It was for them. It had their name on it. And they could just pick what they wanted, fill in like a HubSpot form, I think. And then they could get started working with us. And so at the time, we were selling to tons and tons of B2B SaaS companies.
building their like companion apps and we heard enough times from enough founders or enough heads of sales like hey, where did you get this tool? This is really interesting Can I can we use it and I was like, well, we just we built it in house It's just for us. Now, of course my head of sales at the time Taylor amazing guy he pushed and pushed and pushed me He's like look we got to build a product. Let's go build a product. So Alright, we went we raised some VC. We started a startup called sales, right and we launched in 2018
And that is when I got heavy, heavy into pricing because we had to now model every possible pricing model you could imagine inside our software. And, you know, so that was really fascinating. And then I would get on these calls with revenue leaders as I was doing founder led sales at the early stages of our company. And they would always ask a question. Kind of towards the end of our conversation, they would always ask, like, what do you think of our pricing? Do you think it's good?
Michael Bernzweig (03:28.329)
Ryan.
Bill Wilson (03:46.08)
And so that's when I really started to get in the feeling that there was something going on inside B2B SaaS pricing, that people were a little uncomfortable. They were a little apprehensive, maybe a little anxious about their own structures. And that's when I realized there was a bit of a problem. that's my realization was, is that this doesn't, why is this such a problem? Like, why do people have such a hard time?
either talking about it, why are they scared of it? Like I just could feel the anxiety across the Zoom link, you know?
Michael Bernzweig (04:15.637)
Yeah, and it's something that should be so measurable and, you know, black and white, but it sounds like there's a lot more art and, yeah, motion.
Bill Wilson (04:20.064)
Mm-hmm. Yeah.
Yeah, there's a lot of emotion behind it is what I've realized. Yeah, a lot of emotion. And so that's when I started really digging in. ran, I think I ran my first sort of pricing consulting gig while, while I was at the startup and we helped the company go from basically, I think they were around, I don't know, it was really early stage. They were like 500 K and we helped them get to like a million and a half and eight or nine months or something. It was a lot of fun. And so fast forward to 2020.
We got acquired by a merchant record company based out of Santa Barbara called Fast Spring. And so they acquired us in November. And after that, was kind of, don't know where they know what to do. I still owned that agency building mobile apps, but the awesome guy that I had put in charge basically said to me, said, you're not coming back, are you? I really want to run this thing. so, yeah, so within six months of that, I sold my agency. And so now I'm like, what do I do now? And so a friend of mine,
Michael Bernzweig (05:12.328)
Ha
Bill Wilson (05:23.914)
Dan Martel ran a company called SaaS Academy. I was also a client. And he suggested that I come and help SaaS founders at SaaS Academy. So I started coaching and gravitated. did all kinds, like marketing and sales and every type of coaching product. But really, I was really gravitated towards the pricing questions. And so pretty soon, just became very grassroots built by all of my experiences in talking to
all of those revenue leaders, all of those founders reading as much as I possibly could, you know, absorbing everything price intelligently had to say, Patrick Campbell, you know, all of these people that were in it at that time. And, yeah, that's, that's how I started off. then now, so fast forward to now we've got pace pricing. It is, a consultancy that's designed to help B2B SaaS companies, you know, restructure and think about how pricing works. But more importantly, our mission is to install good pricing practice into B2B SaaS companies.
Because ultimately that's what I want. I want to eliminate that fear and that anxiety around once you set your pricing, you never change it, which I hear over and over and over again.
Michael Bernzweig (06:31.133)
Yeah, so for a lot of SaaS founders, they spend so much time, you know, and effort and energy trying to find that product market fit, trying to get things to the point where customers are, you know, just onboarding, you know, just, you know, see the value and what they're offering and they're not even pitching the products anymore. It just fills a need. And I guess the question is, what is the dynamic between
finding product market fit and pricing. At what point should an organization say, we've got the product where it needs to be, we've got enough momentum with our client base, when should we start trying to figure out the pricing game?
Bill Wilson (07:18.976)
Mm-hmm. It's a really great question. And I have a saying, pricing is product and product is pricing. And they really can't be separated. And there's also a third person involved there, which is called positioning. And so those three Ps make up a pretty strong three-legged stool. But yeah, I think in the early days, what I find is that two things happen. One, companies obsess about product-market fit when they really need to be thinking about price product.
Michael Bernzweig (07:35.061)
Sure.
Bill Wilson (07:47.736)
market fit, you know, like sort of like those, things together
Bill Wilson (08:01.774)
so I find that they dig into pricing almost too early. They over engineer their pricing at the beginning. But the most important part for me, I guess, at the early stage for those companies is that they need to be thinking about it as early as possible. And I don't mean that means they have to spend an exorbitant amount of time doing research and all these types of things, but it needs to be a first class.
Bill Wilson (08:28.992)
Citizen in their world. It's got to be like product. It's got to be like marketing It's got to be like sales because it means so much and it's not the price point. It's not the price point It's how you charge for the product. It's how you set up the offer It's what you're capturing how you're capturing value If you can get that right and you have one plan you are off to the races, right? If you can figure out what your customers value early on and start aligning your product offering around that you're gonna have a much easier time with it so I think that's when people need to
Like I think if they can lean into that early and then iterate just like they do on their product, they're trying to find product market fit all the time. They need to be trying to find price market fit all the time as well. And that's really when I say price again, I mean kind of like packaging and price together. So that's that's kind how I think about it.
Michael Bernzweig (09:14.965)
So what are the dangers of having pricing that's both either out of sync with your offer or too high or too low? What are the danger signs that the companies, or the warning signals companies should be looking for that something's not right?
Bill Wilson (09:34.382)
Mm-hmm. Well, in SAS, and I don't want to oversimplify the game, but there's only three things we can really impact. We can impact acquisition. We can impact expansion. And we can impact retention. And pricing plays roles in all of those. So how does it show up? What are the signs that maybe it's not working great? So one of those is retention. And so at some point, someone signed up for your software and got value. And they really thought it was great.
and they started paying you, especially if they've been paying you for a while, but then they churn, right? And I'm not talking about the people who churn because they go to business or whatever. I'm talking about people who are genuinely just, this isn't for me anymore. So there's some disconnect usually between the value they're getting and the amount of money that's being, that's parting from their wallet each month. And so at the beginning, it can be very parallel, right? It can be very parallel. So think per user pricing for a small company, very parallel.
Michael Bernzweig (10:21.919)
Mm-hmm.
Bill Wilson (10:29.966)
three or four people in the company, no problem, we're good, that's fine. But eventually as you grow and grow and grow, you start to wonder, like it starts, the value divide starts to grow between, I'm paying you per user, but really like I've got admin people in here now, they don't really do much with it, they're, you know, all those kinds of signs. And that starts to start to, you start to add some friction in the actual product value story. And that's one of the big signs for me is like around the product value. So if you've got reasonably high churn and a lot of it's being, you know, it's,
People are saying it's product or it's whatever. It's usually a value story. It's a connection between the product and the price The other kinds of signs are about Priced too low for example, which I often see especially with young SAS companies is that they never get any pushback on price Right I've said for years a good deal is when both sides feel a little bit uncomfortable and so there needs to be
Michael Bernzweig (11:12.841)
Yeah.
Michael Bernzweig (11:26.239)
I like that.
Bill Wilson (11:27.31)
There needs to be an element of risk in both sides. Can we deliver as the SaaS company? Can we really do what we say we're going to do? And the customer needs to be going, man, this is a decent size investment. I really hope I can make this work. Because if both sides are invested in making the solution work, especially in B2B, you have a much better chance, as opposed to someone going, oh, $10 a month, no problem. Yeah, let's just do it. And then they just either forget about it they don't do it now. I know $10 a month in B2B is not exactly a reasonable example, but.
Michael Bernzweig (11:29.385)
Yeah.
Bill Wilson (11:57.196)
I think it illustrates the point. It's that there's, you need to have some pushback. So I think you need to have at least, if you don't have 30 % of people pushing back on your pricing, you're probably priced too low. You know, probably priced too low. So that's early stuff.
Michael Bernzweig (11:57.46)
Right.
Michael Bernzweig (12:08.885)
I like it, it makes a lot of sense. I think, talk to me about time to value, like in terms of, know, from a client coming aboard until they see that first impact that gives them the, you know, the value that they were looking for when they signed up for a solution. Like, what is the importance there?
Bill Wilson (12:34.134)
Yeah, it's super important because the faster we can get them to that aha moment, the more we can embed ourselves in their world and the more they come to rely on us and the more sticky we become. And so that's the tried and true. Everybody says that, but there's something interesting when it comes to pricing and packaging. When you think about these things, a lot of times we build products that can do a lot of things and we kind of might get lost in our own vision sometimes as we try and find product market fit. The way we think customers get value is different than they actually get value.
And that happens a lot. It happened to me. The way I thought people were going to get value with SalesRate is not how they were getting value with it. It was a great demo tool for them, and I wanted it to be a contract closing tool. Very different use cases. And so I think how people get value and how they get to value is a bit of a pricing story as well. Because if I can package my offering around the thing that the customer
needs to get done right away. I'm resisting saying jobs to be done, but it's jobs to be done. All right. So, you know, what is the very first job that your customer is trying to get done out of the solution that you're building? And if you can package around that, your time to value is going to be so much faster because a it's a job they're trying to actively solve. They're really motivated to get it solved because it's a job, not a problem. And if you can package around that and just deliver that very vertical slice of that,
Michael Bernzweig (13:38.12)
Yeah.
Bill Wilson (14:03.692)
of that problem or that job to be done, you're gonna, they're gonna get to value a lot faster. And so that's how they connect. And so my philosophy is that jobs to be done is essentially the only way to price and package, especially in B2B SPAS, especially now with so much more emphasis on AI and things. But it is a core tenant of the way I work is that we need to be thinking about the job our customers are trying to get done, how fast they can get that done, and then thinking about, okay, what's the next job that shows up?
after we solve that. And so that keeps the cycle of getting to value going and allows us as a team to really focus in on how quickly can we get them to that value. And so it forces us to niche down in our own product, which can feel really uncomfortable for a lot of companies. They feel like they might be alienating people.
Michael Bernzweig (14:50.301)
Yeah. And I'm right there with you. I yeah, I think a lot of organizations, you know, maybe, you know, provide so many features that it's just overwhelming to the user. And it's kind of like, why did I sign up for this in the first place? There was only two things that I needed and it does all this other superfluous stuff. mean, let's just, you know, zero in on the couple of things that are providing the most value to the most users.
Bill Wilson (15:19.437)
Mm-hmm.
Michael Bernzweig (15:19.785)
know, strip out everything else. And I think that helps to get to the right space. you know, sure, sure.
Michael Bernzweig (15:36.085)
So a lot of organizations I think are in a space where they have so many conflicting forces that they're working with every day. have different parts of the organization, investors, all kinds of different forces, all with different goals. And is there...
getting to the pricing question, how do they balance all of that? How do they get to the point where they're finding that source of truth that's gonna push the business forward in the best direction?
Bill Wilson (16:18.572)
Yeah, it's interesting, you know, because we can put a lot of effort into a lot of different areas
Yeah, overall, you know, with a lot of different forces pulling on a founder, especially early on.
Bill Wilson (16:41.934)
Yeah. Do you want to ask me that question again?
Michael Bernzweig (16:54.673)
How do they balance pricing? Because a lot of investors might have one vision as to where the price should be. The customers may have a very different vision. Other departments may have their own ideas. How do you keep it from being an emotional issue or an emotional decision and do something based on facts and figures and statistics and you know.
Bill Wilson (17:17.123)
Mm-hmm.
Bill Wilson (17:22.082)
Well, it's interesting. Yeah, good question. Like I think
I think there's something really interesting you said there about the emotional, not making an emotional decision. And I would, I guess I would submit that it has to be at some level because it is so fundamental to the relationship with you and your customer. And especially in the early days with SAS, you know, it's often founder led sales or there's, like there's, it's, you're still really close to the deals. even have friends now that are running, you know, $20 million a year software companies, which isn't huge by any means, but still.
They're still involved in a lot of deals. So they're still having those conversations. so it does need to be data driven, but it also needs to be, it's like art and science, you know? Like there's a level of it that has to still be feel. And the feeling part of it is like, it's your customers hold all the answers is kind of what I say, right? So just like in product where we talk to our customers all the time to understand what they need, we don't listen to them when they say,
Michael Bernzweig (17:58.292)
Right.
Bill Wilson (18:24.792)
build me this feature, we try and figure out what they're trying to do. And then we try and solve that problem with software. So it's the same with pricing. So we need to get out there and trying to understand what they value. We need to have conversations with them. need to be, and that's how you make it. Like once you get that level of emotional data from your customer about how they feel and how they psychologically perceive things, then you can combine that with some quantitative data to really try and reinforce the two things.
But at some level, has to be a bit of an emotional, there's an emotional part of it, but it needs to be backed by some science. I don't know if that makes sense, but that's kind of how I feel about it.
Michael Bernzweig (19:01.077)
No, absolutely. And what I'm hearing is that there's a point at which it becomes uncomfortable for either side. And that's the point at which you've pushed the pricing darn near close to where it should be versus the other end of the spectrum where, I don't want to say customers are taking advantage, but on the other end of the spectrum where they're receiving way more value than what they're paying.
Bill Wilson (19:28.908)
Yeah, absolutely. I mean, and that shows up across the spectrum, right? You can see people who maybe sell a piece of software, let's just say it's a thousand dollars a month. And there's a few people using it they're getting some value. And then another person buys that exact same thousand dollar a month piece of software, but they get an outsized value from it because they use it a lot more or something, right? So that's, those are also unfair situations, right?
Michael Bernzweig (19:50.687)
Brian.
Bill Wilson (19:54.67)
To us, it's asking me, it's like, cool, they're getting a thousand bucks a month. But yeah, like, okay, this person over here is getting a ton more value than this person. So that means this person's probably overpaying. And that means this person over here is underpaying. And so the real trick is trying to figure out how we can balance the needs with our needs, right? So that we can get really good metrics. mean, ultimately what we're after is net revenue retention, you know, well above a hundred percent because churn is real, right? It happens. And so we have to combat it somehow.
Michael Bernzweig (20:17.929)
Yeah, I think.
Bill Wilson (20:23.458)
The only way you can is by selling more to your existing customer.
Michael Bernzweig (20:26.333)
Yeah, and obviously you can't be all things to all people. And I think many times finding who is or which customer persona is receiving the most value from what you're doing and just focusing on that because at the end of the day, I mean, I think clearly trying to be all things to all people, you're nothing to anyone. So I think that, yeah, that's.
Bill Wilson (20:48.398)
I agree 100%. You know, great. You know, I totally agree with you there. Like if you serve, try and serve everyone, you serve no one kind of thing. You know, totally agree with you.
Michael Bernzweig (20:58.933)
So talk to me a little bit about pricing models. And a lot of this has changed with AI because you have a lot of usage-based things. And I think we're heading for a point, at least this is my gut, that at this point, we're so early on in AI that a lot of organizations, they're all fighting for market share. There is no clear.
You know, some people would say, you know, yes, there is a clear leader at this point, but we're, we're, it's a very fragmented market. Everyone's fighting for market share. It's not like Google has 90 % of the market like they had with, search. So I think right now there's a lot of solutions in the AI space that are heavily subsidized to be upfront. And I think.
you know, at some point if things don't change in terms of what it actually costs to deliver these AI solutions, I think there's gonna be a point of reckoning and a wake-up call for a lot of organizations when they pay what it actually costs for the services being delivered. But I guess, talk to me a little bit about pricing models. Obviously you can have a flat rate or a usage-based or something hybrid or somewhere in between.
What do you see across different organizations and how do you decide what makes sense?
Bill Wilson (22:23.938)
Well, at risk of painting everything with the same brush, I really do think hybrid models are probably the way to go. We need some level of, in SAS especially, there's probably going to be some level of feature separation based on need and jobs to be done, which is what I was mentioning before. Very, very important, not everybody needs to solve the same jobs at the same time. So how do we meet people where they are? So that's how we get a big portion of the demand curve, like willingness to pay curve, based on their needs.
but after that, it's traditionally in SAS. If you've got a good, better, best model at all, you know, which is very, very common, getting people to move left to right is really hard. Getting people to move from the good plan to the better plan to the best plan. It's very traditionally very, very hard. And so what we need to do is we need to figure out a way. can we capture the value that we're creating for those people in the plans that they're in over and above the price that they're already paying? So that's where the usage piece comes in.
And so for me, when I look at hybrid models, I'm always looking at, there's probably some core value metric that we're charging by. It doesn't have to be users. Often it is. I'm not a huge fan of per user pricing, but sometimes it's a necessary evil or it's necessary depending on the market you're in. But then there's got to be some level of usage metric. And now some people think, well, it's like, then we're going to have usage based pricing. It's like, well, you can, or it can be structured in such a way that there's limits or entitlements restriction on use of certain amounts that
you know, drive people into the next plan, or maybe they buy a package of like a bucket of widgets, for example, you know, think, you know, who's a good example of this, like MailChimp selling text messages with their latest plans, right? They're selling it in buckets, right? So that's the kind of thing you need to build in. So having two dimensions, you know, does a lot of things for you, right? One, it allows you to meet customers where they are sophistication wise.
and also allows them to meet where they are in depth of usage-wise. So you could have a very, very sophisticated small customer that uses it a lot. You can have a very unsophisticated customer that, or a very sophisticated customer that doesn't use it a lot, but they still need the sophistication. So how do we meet everybody where they are? And so I think that's a big one.
Michael Bernzweig (24:37.205)
So I want to pull on a thread that you kind of opened up earlier in the conversation. You talked a little bit about value perception and what role does perceived value play in pricing plans?
Bill Wilson (24:55.79)
To me, it's huge. One of the core things I lean into is what do the customers value and how do they extract value from the software? And we do that, we can't straight up ask them like, hey, how do you get value out of the software? We need to understand what the jobs are trying to solve and do. But yeah, very, very tightly tied. So when it comes to that hybrid model and you're thinking about, what are we going to charge by? There's some very, very specific things we need to think about in terms of value. And one of the biggest ones is
customer connectedness to that value. It's like how closely are they related to the thing that we're going to charge them by? How closely do they correlate value to that thing? So for example, if you are charging per user, but you don't really feel like the value you get is on a per user basis, then it's going to start to feel like it's not really that connected. It's not a tight enough correlation. So I often, I use three,
variables when I think about customers, about customer clarity on a value metric to measure this. The first one is how tightly is it tied to value? The other two are also very important. One of them is fairness and familiarity. So you need to ask yourself, is this a fair thing to charge someone for? And are they familiar with it already? Are they something they're measuring in their own business already? Is it something they think about, know, they budget for, whatever it happens to be. So it needs to be in their world.
And then the third one is predictability, especially with usage. It's so challenging. So they need to be able to think about it and go and understand their potential usage over time. Otherwise they're going to get into that usage anxiety where they're like, I can't use the software because I'm going to run out of credits or I'm going to run out of this and I don't want to do that. And so we're actually having the opposite impact of like, instead of pay for what you need, it's like, I feel like I'm being put into a box. And so
those three things have to really score high in order for you to have a really solid value metric. And I think that's where...
Michael Bernzweig (26:58.485)
Well, I think you look at Ahrefs, I think they're a classic example of turning the page on customers in terms of usage-based pricing. And I think the customers revolted. So that's really, really interesting.
Bill Wilson (27:14.449)
Right. Yeah. So it really has to tie tightly to value. And then for us as the SaaS company, it really has to be scalable. So basically if it goes up, I mean, is it good for our business? Can we measure it? You know, can we actually reliably track it? So for example, a lot of people want to get on the action of a, uh, get in the transaction of a customer's, like what you're facilitating, right? They want to get a piece of that pie. Oh, we'll take 0.5 % of all your invoices. Well, if you can't track the invoices, you're not really going to be able to do that. Right. So
It's like, how do you get in their world, and if you can track it and measure it? And can you bill for it? That's the other thing. The realities of operational SaaS are that you need to be able to operate the thing and actually reliably bill for and collect and all those kinds of things. So sometimes some usage metrics get in the way of that, and they're just impossible to deal with. And then usually that's a problem inside the company that can be solved, but it's sometimes something that weighs into it in the early days, especially.
Michael Bernzweig (28:12.565)
So when you first start working with a new client, what is, know, are there a couple of typical scenarios that you see right off that, you know, more often than not, you'll see a client end up on your doorstep for a couple of specific reasons?
Bill Wilson (28:30.606)
Yeah, the big ones are they haven't changed their pricing in a very long time and now they're stuck. They don't know what to do. They know they need to change it. They don't know how. They've probably or they have changed it over the years and they haven't brought their existing customers with them. And so now they have skew upon skew upon skew and operational nightmares around how they're managing their clients. So that's a big one. Sometimes founders will show up and go, we think we're leaving money on the table. We just don't know.
Like we think there's opportunities here, and we just don't know how to think about how to capture those. And that's another big one. The other one is that people wake up to this per user model not being correct. Right? And the classic one, the one I say all the time that really I think drives it home is this. If you're a B2B SaaS company that sells to other B2B SaaS companies, and you sell per user, you have built a barometer for the market.
Because when the market shifts and people get laid off, they cut seats. That means they reduce licenses. That means your licenses are getting reduced. That means your revenue is going down, which means you might have to cut staff and then, you know, and so on and so on. Right. So we're basically building a barometer for, for what's actually happening in the market. And we don't want to do that. And the other thing about per user pricing is we're tying it to one of the most expensive things a company can add to their business. It's a human.
Michael Bernzweig (29:41.845)
Yeah, it's an efficient cycle.
Bill Wilson (29:57.614)
It's a very expensive decision to bring on another person. then, of course, all the other things follow. Like, I've to get them hardware. I've got to get them a space to sit. However, it's going to go, and I need to buy these licenses. But we're building our entire business on a company adding people. And so in this day and age with AI, people are doing things way more efficiently than they ever have. So that is shining a light directly where people don't want it. It's like, you know.
Michael Bernzweig (30:18.975)
Yes.
Bill Wilson (30:25.974)
I don't need all these seats because I just cut half my support staff, which is a sad reality, but cut half my support staff because we replaced it with a really great AI agent. And so therefore I need to cut these seats.
Michael Bernzweig (30:35.091)
So clearly years of wisdom, years of real knowledge in the field, having been there and done that with a lot of these things. And you've seen the good, the bad, the ugly over the years. When you're working with a new client, what does that journey look like? Where do you start?
Bill Wilson (30:47.075)
Hm.
Bill Wilson (30:53.646)
It depends on what their goals are, but oftentimes it has to do with one of those three levers, retention, expansion, acquisition, what are their goals? But I often start by honestly talking to everybody on their team. I dig in deep on what they think the value is their customers get and what their customers are telling them. Because getting a picture of how they feel about the value in their product tells me a lot about where the friction points are going to show up in the business in terms of the pricing.
Then we talk to the customers. So we do a lot of deep interviews with customers, survey them. We do a lot of quantitative analysis at the very, very beginning. And then we take a look at, we get a picture of where they are in terms of how did their opportunities show up? How did they win? How did they lose? What are all the meat and potatoes of the subscription look like? So we kind of look at all those things to really get a good picture of what's actually happening in the business.
But yeah, I don't know if that's the question you're asking, but that's.
Michael Bernzweig (31:52.499)
Yeah, no, absolutely. And do you find that early stage founders are sometimes, it sounds like you're doing a lot of the, you know, reaching out to customers and trying to figure out where things are at, but do you find that our founders, someone hesitant to actually reach out to their customers and have deep, meaningful conversations? they scared in some ways or what do you find?
Bill Wilson (32:14.446)
They are.
Bill Wilson (32:17.986)
Yeah, they definitely fear the DMC, the deep meaningful conversation. and I often tell them, say, your customers want you to have good pricing. They do. They want, they want to feel good about their purchase, you know, and and that's because in B2B, we, we often think of that we're a business selling to another business. But if anybody who's ever done founder led sales knows it's not that it's a person selling to another person. It's about trust and it's about ability.
Michael Bernzweig (32:21.833)
Yeah.
Bill Wilson (32:47.488)
And so they oftentimes assume you have the capability, but they just don't trust that you can actually deliver it for them. And so that piece, like a lot of people in B2B, especially with big purchases, they're putting their neck on the line, right? They're actually putting their neck like, who do you think is going to get fired if they, if they go and pay, you know, some startup, a few hundred thousand dollars a year and that implementation goes South, who do you think's hung out for that? That's the person who bought it. So it's about people.
Michael Bernzweig (33:12.884)
and
Bill Wilson (33:17.484)
And so I think that's the, that's the connection piece. And I think that's the thing I talked to founders about is like, look, they're just, want you to win because they already bought in. They have a vested interest in you winning. Yeah, of course. And if they're unhappy, all the better. I want to talk to the unhappy ones too.
Michael Bernzweig (33:26.087)
Yeah, exactly. They're there with you. They want to see you make it.
Michael Bernzweig (33:33.945)
Yeah. And I want to finish up with this guy. I feel like we could talk all day because there's so many, so many places that we could cover, overall the years, what are, know, in speaking to your clients, customers, what are some of the biggest revelations that you've exposed to founders that they didn't realize on their own that were eye-opening to the founders?
Bill Wilson (33:37.262)
Yeah, this is so much fun. Yeah.
Bill Wilson (33:47.97)
Mm-hmm.
Bill Wilson (33:57.303)
Mm-hmm.
Bill Wilson (34:01.612)
Yeah, sometimes it's these things that they might have an undercurrent of, they might think is happening, but they just don't. And honestly, it's a bit of ostrich, you know, head in the sand stuff is really what's happening. And I get to shine a big light on that that they don't necessarily like. But I would say it's the orthogonal business model is the biggest one. It's like the way that you have structured your billing and your charging and how you offer it does is completely perpendicular to the way the customer gets value.
Michael Bernzweig (34:10.431)
Yeah.
Bill Wilson (34:32.002)
Right. And it shows up in angst. Like customers get, why am I paying for this? And I don't know. Like they get, they kind of get vocal about it. They're like, I need this, but I just, I don't, I just, some days I don't like seasonality or something, you know, like there's all kinds of things that are built in these business. They just don't want to hear. But when we come back with qualitative and quantitative data that just says, this is what your customers are experiencing. It's very black and white. And because like I said, at the beginning, my job is to install good pricing practice in to be.
Michael Bernzweig (34:39.829)
Great.
Michael Bernzweig (34:54.483)
black and white.
Bill Wilson (35:03.438)
What I want to do, did that come through? Oh yeah, sorry. Yeah, so what I want to do is install good B2B SaaS pricing practice. Or I want to sell good pricing practice in B2B SaaS companies. And part of that is showing them how to have those conversations, showing them how to think about product through the lens of pricing, and really sort of bake it into the whole ecosystem of the business. Because once they make the change once,
Michael Bernzweig (35:06.269)
Yeah.
Bill Wilson (35:32.534)
And they go through the pain and it is painful moving existing customers to new pricing. But once they go through that motion, they'll want to do it again and again and again, cause they see the impact. Cause a small change to pricing has a massive impact on the bottom line because you know, there's hardly any cost of acquisition. There's no, there's no cost to it, you know,
Michael Bernzweig (35:49.16)
yeah.
Right, they're already your customers. So now I think this is great and a really wonderful deep dive. I'm gonna make sure that we leave a link in the show notes for anybody that would like to reach out to you. And today we've had Bill Wilson, CEO and founder of Pace Pricing on the software spotlight this week. For anybody that is tuning in for the first time.
in addition to consulting spotlight, also have software spotlight and career spotlight. You can find all three on your favorite podcast players. And, if you're looking to keep up to date with what's going on here at software Oasis, just go to software Oasis.com backslash subscribe, and you can get on our weekly email newsletter list to keep up with all of the events and fun things going on here.
Once again, Bill, thank you so much for joining us on the podcast tonight
Bill Wilson (36:48.696)
Thank you very much, it was a blast.