Welcome to another episode of the Product Thinking podcast. This week, host Melissa Perri is joined by Patrick Campbell, CEO of Profitwell. They discuss all things pricing, diving deep into the psychology behind pricing models and how to choose a pricing strategy. Patrick talks about the biggest mistakes businesses make when pricing, when and how often you should be raising your prices, how to align your price changes with your value metrics and communicate those changes to customers, and more. 

You’ll hear Melissa and Patrick talk about:

Patrick's team developed a financial analytics product and decided to give it away for free in order to get more data and improve their algorithms. 37,000 companies have used it in the past seven years.

Patrick's company was acquired by Paddle for $200 million in May 2022, with a mission to grow subscription companies automatically.

Pricing is a core competency for a business and should not be treated as a quick task to be done and moved on from. It is the very essence of a business as it represents the value of a product or service and how it is perceived by customers.

Businesses should experiment with monetization once per quarter and raise prices once per year.

Raising prices too often can lead to customer churn. However, this eventually normalizes as ‘fence-sitting’ customers leave.

Make sure your price increase is justified by the value you provide to the customer. Align your pricing with a value metric, such as revenue.

Packaging and pricing go hand in hand and can be thought of in terms of charging different prices for different pieces of value of the product.

Sustaining a social media platform like Twitter is difficult, and it can be hard to monetize.

Adobe's move from selling Photoshop for $1,000 to a subscription model of $32 a month was an "eye-opening" change that allowed for more investment in the product.

It's important to get the finance team aligned with the move to a subscription model, as costs will initially go up and revenue will initially go down.

Pricing is a whole company problem, not just a product problem.

Resources

Patrick Campbell Website | Email | LinkedIn

ProfitWell

In this Dear Melissa segment, Melissa answers subscribers’ questions about whether or not adding a business owner into a product team is the right call, how much detail product managers should provide to their engineering teams, and if there’s a right time to join a startup as a product manager. 

Q: I've been asked to include a business owner from outside technology in the teams. I'm worried that this will slow decision making and reduce our time to market. How should I tackle this?

A: Unfortunately, this happens a lot, especially in large traditional companies and ones that are going through transformations. They've got this old mentality of the tech team being separate and responsible for infrastructure, and the business side doing the “real work.” Here’s how I would handle this issue.

Q: What do you think is a realistic level of detail for a PM to provide their engineering team? 

A: It’s all about balance. There needs to be a balance between how much information you need and what your cultural capacity is to meet the expectations of the information provided. Listen in to find out how to achieve that balance.

Q: Is there a good timing for joining a startup?

A: This company clearly didn't know what they wanted out of a head of product. It sounded like they may have wanted a lackey, somebody to do the lower-level stuff. There is a point in a startup where it is too early for a Head of Product. Tune in to learn why.

Resources

Melissa Perri on LinkedIn | Twitter

MelissaPerri.com | CPO Accelerator

In this week’s episode, Melissa Perri and Christina Wodtke, author of Radical Focus, get into all things OKRs. Christina shares how she discovered the power of OKRs, why she sees OKRs as a “vitamin, not a medicine,” why OKRs aren’t synonymous with product strategy, what it looks like to apply key results in the wrong way, how to use OKRs to create “super employees,” and so much more. 

Here are some key points Christina and Melissa talk about:

Christina talks about her professional background and what led her to write the first and second editions of her book, Radical Focus: Achieving Your Most Important Goals with Objectives and Key Results.

Christina believes that OKRs are ideally set and implemented at a team level, but they not a safety net that provides your team with product strategy.

Christina highlights the differences between an OKR, product strategy, and business strategy and how they work together in the business ecosystem.

An excellent product strategy and good annual OKRs can help execute an ambitious five-year plan.

Christina and Melissa explore the really difficult question, “When do we stop?” and talk about how checking back in with your OKRs quarter after quarter can help answer it. 

Resources:

Christina Wodtke on LinkedIn | Twitter 

Radical Focus

In this week’s episode, Melissa Perri invites April Dunford, author of the best-selling book Obviously Awesome, How to Nail Product Positioning so Customers Get It, Buy It, Love It on the podcast. April has 25 years of experience leading marketing, product, and sales teams and now runs her consulting firm, helping companies of all shapes and sizes, including Google, IBM, Postman, and Epic Games, nail their positioning. 

Here are some key points April and Melissa talk about:

April talks about her academic and professional background and what led her to write her book on product positioning, Obviously Awesome.

According to April, product positioning is how your product is the best in the world at delivering some value that a well-defined set of target customers cares about. “Positioning is really about taking a customer that doesn't know too much about our [product] and orienting them towards it,” she tells Melissa.

April describes an example of good positioning that a company can execute and how to assess if your product’s positioning is weak or strong.

One of the key concepts in product positioning is looking at your product from the perspective of the consumer to determine what makes your product unique.

It is best to build your product according to a positioning thesis based on information about your competitors and consumers. However, the thesis is usually wrong, so use your initial launch to improve it.

The essence of product marketing is product positioning.

Producing positioning can only succeed when the market managers work harmoniously with the product managers and sales team, to truly understand the products' place in the market.

If we don't have an actionable segmentation, it doesn't matter if we have product market fit. 

April shares her expertise on what product teams and marketing teams should be doing to truly understand and leverage their product positioning.

Resources

April Dunford on the web | Twitter

We’ve made it to our 100th episode of the podcast! Melissa celebrates by tying up the year with a full review of your most frequently asked questions. Common themes included transitioning into a new role, communicating with leadership, how to divide product work amongst different teams, and many more. Listen in as Melissa summarizes her advice on each of these big topics, and then shares her product predictions for 2023 (including a conversation about why winning in a recession is largely connected to good product management). Happy New Year to all of our listeners! 

Resources

Melissa Perri on LinkedIn | Twitter

MelissaPerri.com | CPO Accelerator

Melissa Perri welcomes Ezinne Udezue to this episode of the Product Thinking Podcast. Ezinne is the CPO of WP Engine, a platform that provides solutions to create marketable sites and apps on WordPress, as well as the author of Product Management for Product-Led Growth, coming 2023. Melissa asks Ezinne what she thinks the key is to being a successful product leader, Ezinne shares her definition of product-led growth, and they discuss how product-led growth applies to B2B and Enterprise products, core PLG tactics, what PMs need to understand about marketing and how product collaborates with marketing and sales in a PLG company, and much more. 

Here are some key points you’ll hear Melissa and Ezinne explore:

Her journey into product leadership.

Product leaders are measured on impact, so they should be someone that people look up to. "It comes down to having a method…a way one thinks about product," 

Ezinne says. A key part of becoming a successful product manager is being able to explain your product to people in a way they can understand. 

"You're combining all those signals and setting context and creating options, your ideas backlog, your product backlog, and then you're making a choice. That to me is what product strategy is," Ezinne tells Melissa. 

Ezinne lists skills and attributes companies and product managers need to hone for successful product growth.

Word of mouth marketing is an important component of product-led growth. People are more likely to come to you if you offer fast and efficient solutions to their problems.  

With a product-led growth strategy, sales and marketing are able to focus on upselling instead of bombarding customers. They can focus on individuals who are already interested in the product.

The first step to product-led growth is mapping out the customer journey. Identify market segments to attack and generate value. Since there are so many new companies emerging every day, acquiring a customer is difficult. Ezinne stresses being very intentional, and being creative about virality.

Resources

Ezinne Udezue | LinkedIn

WP Engine

In this Dear Melissa segment, Melissa answers subscribers’ questions about overlap between roles, pitfalls companies fall into while scaling, and to what extent a company should be product-led.

Q: What overlap do you see between the role of Product Manager and UX Designer? 

Q: What pitfalls have you seen companies fall into while they were scaling? What are the main principles to get right in this exciting yet challenging stage of company's growth?

Q: To what extent should a company be product-led? Assuming that a company relies both on services and products, are there variances to what product-led means for such companies? Or does product-led mainly apply to companies where the product is the center of the business? 

Resources

Melissa Perri on LinkedIn | Twitter

MelissaPerri.com

Melissa Perri welcomes Janna Bastow to this episode of the Product Thinking Podcast. Janna is the founder of Mind the Product and the CEO and founder of ProdPad, which is software that helps manage your roadmap and product backlog. Janna and Melissa discuss the story of how ProdPad came to be and why Janna was inspired to build a more robust road mapping tool, how to become the most informed PM in your industry, the process behind creating the Now, Next, Later roadmap format and why it’s caught on, how to communicate with other teams both before and after you create your roadmap, and how to influence your leadership to evolve their processes and thinking around road mapping. 

Here are some key points you’ll hear Melissa and Janna talk about:

Janna shares how ProdPad came to fruition. “Some of the immediate problems were the fact that we have to ask the same questions over and over again: Why are we doing this thing, what is this thing we're doing? What problem does it solve?” 

Janna has always taken a collaborative approach to product management. She knows she doesn’t have all the answers, so she views her job as asking questions and using the knowledge of the people around her.

When done right, product management is the most fun area of business. You get to play with different ideas, interact with different areas, and make decisions about what gets made.

The Now-Next-Later roadmap focuses on prioritizing the most urgent tasks, identifying what needs to be done, and providing a framework for the scale of certain tasks, emphasizing sequence rather than time. 

Many product managers prefer roadmaps in the style of Now-Next-Later because it doesn’t communicate time at all. They don’t want to be beholden to time estimations in anticipation of over-committing or not hitting deadlines.

ProdPad is a mix of a coach and a SaaS tool designed to help you become a better product manager. It gives you a few key views in a non-exploitative format that allows you to view the order in which you are going to solve problems.

One of the key things product managers can do to convince their leaders to adopt the Now-Next-Later roadmap is to speak their language; try to gain clarity on the core of their resistance.

Resources

Janna Bastow on the Web | LinkedIn | Twitter 

ProdPad | Twitter

In this Dear Melissa segment, Melissa answers subscribers’ questions about advocating for resources in a non-leadership role, whether or not a bottoms-up transformation can really work if leadership isn’t immediately on board, and how to effectively communicate with teams outside of product in order to set realistic expectations and get them on your side. 

Q: As a product manager that is not in a leadership role, how do you recommend advocating for additional resources on your development?

Q: Have you ever seen a product transformation work from bottoms-up, work at the team level first, and then improve at the executive level? If so, what do you think were the deciding factors?

Q: How do I work with non-product teams who have no regard for prioritization or respect for the actual product team’s process?

Resources

Melissa Perri on LinkedIn | Twitter

MelissaPerri.com

Ken Norton is Melissa Perri’s guest on this episode of the Product Thinking Podcast. Ken is an executive coach who is passionate about “whole person” coaching– he works with product leaders not just on their careers but on their growth and development in all facets of their lives. 

Ken joins Melissa to discuss the evolution of product management, the stark difference between empowered and unempowered product teams, his biggest piece of advice to early career PMs, what great leadership looks like, his 14 years of experience working at Google and on products like Google Maps and Google Calendar, and why ultimately, product is all about people. 

Here are some key points Ken and Melissa talk about: 

Ken reflects on how the product management field has changed and matured over the years. Product management is no longer a “nascent, upstart concept”- it’s an established role that people understand the need for.

Ken laments the number of product leaders with no experience in the field being hired into companies. He discusses “this trend of people putting leaders in the position of product leadership, who have never been in the product field before.”

Senior product leaders should develop and execute an apprenticeship-type program for people who want to work in the product field. 

Melissa comments that several product leaders are becoming general managers; she worries about the future of people who are purely product people. Ken says that he sees the general manager position as “a maturity of the product leadership role, a recognition of how important and critical that job really is.”

Successful product leaders learn to lead in a way that inspires others, while confronting challenges in a proactive way.

Ken talks about his experience at Google, and shares stories and examples about the leadership team and their approach to product. 

Ensuring your team’s success means laying your plan out in steps and showing real evidence: it means showing a path forward that people can rally behind.

Resources

Ken Norton on LinkedIn | Twitter | Bring the Donuts, LLC