If you're reading this article, there's a good chance you own, or have some input on, pricing in your organization – after all, every product marketer works on pricing to some degree.

Of course, getting pricing and packaging right is notoriously difficult, but it's a fantastic opportunity for PMMs to really add value and demonstrate their worth to the organization. That's why I'm sharing my pricing and packaging roadmap, designed to help grow company revenue. I want to arm you with some of the current pricing fundamentals so you can build effective pricing and packaging roadmaps for your business, and, in turn, boost your career.

First, though, let's define pricing.

The fundamentals of pricing

Creating, communicating & capturing value

Pricing is creating, communicating, and capturing value. As product marketers, we're already doing this for our products, and so you're already making these decisions and now you can add pricing into the mix as well.

Now the difference between pricing and subscriptions is that in the subscription business, it's all about the predictable recurring payments that those customers give you.

That's a really important concept: predictable, recurring revenue. This is why subscriptions are very important. And this is why SaaS companies who get this right report that on January 1st 70% of the revenue is already booked. So think about that, more than half of your revenue is already known. I mean, that's exciting, that's predictable, and it's recurring and you keep getting that all the time. It's no wonder why investors love subscription businesses.

What areas do pricing & packaging impact?

To understand this further, we first need to look at each of the areas that pricing and packaging impact. Let's run through this at a very high level.

  • Revenue - this is your sales and your customer success groups. They're bringing in all that revenue.
  • Finance - thinking about margins mid-dollar retention, and all the different ratios to make sure you're profitable.
  • Sales ops - they're probably doing deal desk, what are the different discounts that you're doing, promotions that you're running.
  • Product - you're building a product, you're pricing it, and you want to make sure you're getting value for that.
  • Professional Services - what additional services are you offering? That's usually TNM - how do you price and package that?
  • Tools - how do you deploy pricing? Is there a pricing calculator? ROI calculator? How do you build a quote?
  • Sales enablement - how do you train sales to talk about pricing so they understand how they negotiate it?
  • Customers - they have to understand pricing or they won't buy it, a confused buyer won't buy. Buyers don't want to make mistakes.
  • Competitive intelligence - what are your competitors doing? You're not copying their pricing, but it's going to inform your pricing.
  • Geographies - you have to think about foreign exchange rates, how do different companies and countries think about value? How do they want to buy your product? How do they use it?
  • Legal - you want to make sure if there are third-party hard costs or GDPR or HIPAA if you're dealing with the government, with healthcare you need to make sure that legally you're covered when it comes to your pricing.
  • Contracts - you want to make sure the language in your contracts is covered as well.
  • Compensation - if comp isn't in line with pricing, I've had reps come to my desk and say I'm not selling that product that you just rolled pricing out for. I don't get a commission for it. The comp team was then on my speed dial after that.
  • Revenue recognition (rev rec) - especially for public companies, rev rec is very important. This is not a grey area, it's not routable, if the rev rec rules are changing for SaaS and you're not aligned to that you can't recognize your revenue and that has huge impacts on public companies.
  • Partners - how do you extend your product? How do you expand your pricing and packaging? But the most important one here is...
  • Senior executives - all care about this. I've never met a senior executive that doesn't care.

Who should own the pricing roadmap?

Ideally, a strategic and cross-functional person should own pricing. I know some bigger companies have pricing groups, and if that's the case, the product marketer should be heavily involved. Alternatively, raise your hand own pricing yourself. Here are a few reasons PMMs are uniquely placed to own the pricing roadmap:

  • We're already strategic,
  • We're already cross-functional,
  • We're already teamed up for a product launch,
  • We know our customers,
  • We know the market, and
  • We know our users.

How to own pricing & packaging

Product marketers own go-to-market, and pricing should be a central component of your GTM strategy. In much the same way as product management own the product roadmap, product marketers ought to own the pricing roadmap – both touch everyone in the company.

In the absence of a roadmap, tied into your wider GTM strategy, pricing can become an afterthought. And when that happens, you start losing deals, net dollar retention is down, customers start churning, they're confused, and you're no longer profitable.

But when done right, you can win deals, it can become a differentiator, and you can help companies grow from 1 million to 100 million or even in the billions. So in order to build a pricing roadmap, I need to share two basic pricing concepts with you.

Key concepts for your pricing roadmap

There are a number of key pricing concepts that form the basis of a solid pricing and packaging roadmap.

The first one is a subscription and it has three key revenue buckets. This is the meat of the pricing concepts and it’s very different from traditional businesses, which cared about winning customers. So Microsoft would sell that CD for PowerPoint and Word, and we would download and pay a big chunk of money. But in the SaaS subscription business, you're paying little chunks of money on a monthly basis, whatever that period is to use something.

So it's a win-win here because for the customers they think, "I don't have to outlay as much money", so it's a low barrier to entry, "if I don't like it, I'll just stop paying". For companies, it's easy because you can really win a lot of customers. So it's a win-win.

Now keep is not something traditional businesses cared about, we care about it in SaaS because we want to keep our customers so they can keep paying month after month. We really care about how they use it and if they're getting value. And this is why the customer success departments were born. They're there to make sure they keep using it, they keep paying us month after month, year after year.

No one wants churn - usage of our tools is really important. Before, Microsoft would sell me my CD and probably didn't care if I used it.

The last bucket is growing our customers. Now, this is where you're really in the money. People don't focus on this enough and this is where you do upsell and where you do cross-sell. How do you expand on what your customer's doing so they can do more and pay more money with you to really grow your LTV?

When you focus on this, this is where your revenues can skyrocket. And that's where growth comes from - it's in the expansion bucket.

Win, keep & grow - the framework for your pricing roadmap

So every marketing tactic already focuses on one of these buckets and when you consider these, pricing does as well, it's no different than what you're doing already. So the term you might have heard consultants call this is acquisition, retention, and expansion. The easy way I like to remember it is win, keep, and grow your customers. So these are all the same things when you hear them, and this is the beginning of a basic yet important framework for your pricing roadmap.

Continual development of the four pricing levers

The last set of pricing concepts I want to cover is the continued development of the four pricing levers is price points, and this is where the real power comes into play. So this is:

  • What do you charge?
  • What's the discount?
  • Promotions?
  • Are you doing pricing segmentation?
  • Is it value-based pricing?

These are all things you can answer.

Market segments

What are the shared problems? This is what Pragmatic Institute calls it and I really like it. If you've got a lot of the same problems, and you've got the same problems, you guys are different segments. Product marketers are used to doing or calling it by industry, geography, title or role, size of the company, etc., it's basically clustering problems.

Pricing metrics

This is what you charge for? What is your customer value? Are you B2B or B2C? Talk to your customers, if they value a metric, that's your pricing metric, because that's what they care about. It's probably what they're thinking about when they think about ROI too. Some examples are users, data, email, message, and integrations, there are so many different pricing metrics there's not a finite number on my list.


So you've heard of good, better, best. That's very common, and there's science behind why good, better, best works really well. Some of the conversation options include, where do you put new features? How do you cross-sell? How do you upsell? All of these are very important and they're very powerful.