SaaS is about creating long-term value for your customer, and being compensated appropriately for that value as a business. Learn actionable monetization tips from a Product/Growth operator turned VC.
Matching Price to Value: 3 Lessons in Monetization from Menlo Ventures
1. Professional Background
201
1
2002
2006
2018+
2013+
naomi@menlovc.com
@npilosof
Started growth function at Evernote & Invoice2go
• Evernote: 10M to 100M users
• Invoice2go: Top-grossing business app worldwide
Began career in engineering
New product development
Partner at Menlo Ventures focused on SaaS &
consumer
Advising on product growth/monetization
with companies + communities (Reforge)
Naomi Pilosof Ionita
2. SaaS is a long-term value exchange
between you and your customers...
...it’s about creating value for them,
and being compensated appropriately for that value
6. “ Honestly, it was pretty arbitrary.
We just picked something. ”
7. “ We made it artificially low;
we didn’t want price to get in the way
of people using it. ”
8. “ We wanted to position ourselves as Premium.
One prospective customer told us:
‘ You’re the Apple of your category.
I need to save budget to afford you ’
— and that was fine by us! ”
9. Know Who You’re Building for
Lesson 1 :
Segment Users by
Needs and
Willingness-to-Pay
10. : Customer Segmentation
Lowest WTP
Value speed
Value extra space
Highest WTP
Uber Pool
Uber X
Uber XL / SUV
Uber Select / Black
“ I need to get from A to B ”
11.
12. Value does not automatically translate to Perceived Value
14. Who are your customers ?
Why do they pay you ?
How much are they willing to pay you ?
15. Establish a Pricing Process
Assign
an owner
● Product Growth
(SMB/Self-serve)
● Sales
(Mid-Market/Ent)
Talk to
customers
● Internal feedback
loops
● Survey methods:
- Conjoint Analysis
- Gabor-Granger
- van Westendorp
Be willing
to experiment
● Don’t be afraid
to raise prices
● Isolating by
geo can help
● This work is
never done
16. More Effective Survey Questions
Distribute 100 points across the features below.
Rate features “must have”, “nice to have”, or
“not necessary”.
Which features would you include in an ideal package?
What annual price would you consider acceptable? What
price would you consider expensive, but still willing to pay?
Below is a list of
features – check off
the ones you want.
[No conversation
about price]
ValueWTP
17. Lesson 2 :
Align Pricing & Packaging
with Building Accretive Value
18. : Rebalancing Pricing & Packaging
Increased upgrade rate by 108%
While increasing upgrade price by 33%
Without impacting customer sentiment
19. • Increase prices / use a
smart natural escalator
• Rebalance sticks & carrots
• Upsell / cross-sell users to
higher-priced plans / additional products
How ?
21. Upgrade Levers : Sticks & Carrots
New features
unlocked with
upgrade
Quota limit
forces upgrade
22. Contextual upsells are effective –
user is in high-intent state
and no additional education required
Sticks are Your Value Metrics
23. # Admin Seats
# Equity Grants Disincentivizes usage
# Shareholders Revenue scales with value
Cap Table Management
Revenue doesn’t scale with value
: Picking the Right Value Metric
24. SMB Mid-Market Enterprise Public
Formations
Financings
Liquidity: Tenders, Secondaries
HR & Payroll Integrations
Board Management: Resolutions, Docs
$ As customers grow, they derive more value from Carta $$$$
Support for International Employees
: Picking the Right Premium Features
25. : Rapid Revenue Growth
100
90
80
70
60
50
40
30
20
10
1 2 3 4 5 6 7 8 9 10 11 12 13
$inARR(Millions)
Years
*Year 1 is from time Carta began selling recurring software. Source: Bessemer Venture Partners
26. : Healthy Revenue Retention
100
90
80
70
60
50
40
30
20
10
1 2 3 4 5 6 7 8 9 10 11 12 13
$inARR(Millions)
Years
Goal Achieved
Year 1 revenue retention: 125%
Year 2 revenue retention: 140+%
*Year 1 is from time Carta started selling recurring software. Source: Bessemer Venture Partners
29. Targeted upgrades for
high propensity
Renewal experience for
very low propensity
: Personalized Experiences by Segment
• Reinforce value of
core features
• Build awareness of
premium features
• Offer targeted
promotions/discounts
30. Create predictive audiences — past
actions inform who is likely to perform a
future action
Target personalized messaging & dynamic
offers based on propensity
to convert, upgrade, or renew
: AI-Driven Marketing
31. : Upgrade Campaigns with ClearBrain
Facebook :
Retargeted free users with high propensity
to upgrade:
Conversion up from 4% to 10%
Braze :
Displayed popup for users with
high propensity to upgrade
10% lift in upgrade CTA
32. SMB
Self-Service
Product Team :
- Drives self-service
revenue
- Targets businesses
< 250 employees
: Data-Informed Hand-Offs
Sales Team :
- Upsell leads into
higher ACV customers
Mid-market /
Enterprise
Qualified
leads
based
on data
33. Wrap-Up
2. Align Pricing & Packaging with Building Accretive Value
3. Personalize Monetization with Predictive Data
1. Know Who You’re Building for —
Segment Users by Needs and Willingness-to-Pay