Sagar Thakur is the Business Planning & Pricing Strategy guy at Outreach. He worked in SaaS Monetization Strategy at VMware, and he plays way too many instruments.

In this episode, Sagar talks about the challenges and opportunities of a pricing role as he explains why costs don't drive pricing.

Why you have to check out today's podcast:

• Discover the challenges and opportunities of being a pricing person, and why it's challenging but beneficial to have pricing departments as internal consultants
• Find out what the three-step process is on how to tie value creation and value capture process together
• Understand why prices aren't based on costs but on value/the customers' willingness to pay

"Don't start with pricing. Start with assessing value, quantifying it, understanding it, getting your handle on what value is with a specific feature or product, how it scales, how customers perceive it, where they start, where they end."

– Sagar Thakur

Topics Covered:

01:07 – How Sagar got into pricing

02:28 – The SaaS monetization strategy work he did in VMware

03:48 – The tradeoff: Organizing product portfolio and applying different price metrics

06:42 – What Sagar thinks are the challenges and opportunities of a pricing job

13:11 – How do we build a pricing culture inside an organization? Is it really a pricing culture or is it a culture of value?

16:00 – Pricing departments as internal consultants

17:59 – Having the perception that price is based on costs

21:09 – Sagar's pricing advice

21:57 – Pricing table topics game: "Costs don't drive pricing. Willingness to pay drives pricing."

Key Takeaways:

"In general, simplicity is better until you can make sense, but then if the tradeoffs become too steep, now you need to add the complexity as a color from that perspective." – Sagar Thakur

"The ability to narrate a story or why is it that we're doing what we're doing and being able to support that, it's completely sort of a social / creative / engagement kind of job versus what most people think as an engineering sort of like analyze and say this is the perfect price. Dirty little secret in pricing is that there is no mathematically correct answer. It's a range of solutions which is possible." – Sagar Thakur

"It sort of starts from education, moves to empowering. You can come up with everything on your own. It has to be a collaborative process. And then it's the energized piece, which is like show the organization that this is helping so that we can further attach our pricing perspective to the growth plans of the company and how that helps." – Sagar Thakur

"I think rightfully so that pricing is a central piece to the puzzle of any company's sort of growth strategy, like how they do business and what not." – Sagar Thakur

People / Resources Mentioned:

• Outreach: https://www.outreach.io/
• VMware: https://www.vmware.com/
• Dharmesh Shah: https://www.linkedin.com/in/dharmesh/
• Selling Value: https://www.amazon.com/Selling-Value-Deals-Higher-Prices/dp/1737655217

Connect with Sagar Thakur:

• LinkedIn: https://www.linkedin.com/in/sagar-thakur/

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: [email protected]