Shut up and take my money: How to price things so your customers buy instantly

Selling is easy when you know how pricing works

Tomasz Tunguz (partner at Redpoint) says ICPs should serve three purposes:

  1. First, they should enable you to easily qualify or disqualify a prospect.
  2. Second, you should easily be able to communicate your ICPs so they can find others like them.  
  3. Third, they should be easily defined so you can identify them quickly.

A practical ICP might be: VPs of Sales at venture-backed companies who use HubSpot as a CRM. With this defined you can use a tool like LinkedIn Sales Navigator to filter for VPs of Sales, Crunchbase to cross reference how much venture funding a company has received and then attend HubSpot’s Inbound conference to talk to these folks.

Joel York, Chief Marketing Officer at Accellion, defines three key sales models in SaaS: self-service, transactional, and enterprise. To best explain these, I’ll use examples of companies that use each model:  

  • A tool like Yesware would be self-service. It is low cost, purchased online and the onboarding rarely involves a sales representative or onboarding specialist.  
  • A tool like MailChimp qualifies as transactional. It is a larger purchase, touches multiple stakeholders, could involve some integrations and you might interact with a company representative as you purchase and onboard.  
  • Salesforce would qualify as an enterprise purchase. It involves multiple stakeholders, is at a higher price point, and is typically sold through the Sales Development Representative (SDR) and Account Executive (AE) model.

Defining ICP and a purchasing model are crucial steps to figuring out how pricing works for your business. They’ll enable you to ask the two questions below and form the basis of your pricing model

  1. What other solutions is my ICP currently using and how much do they cost?
  2. Which purchasing model does my solution fit into?

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