 Hello, and thank you for joining our session today on Pricing and Packaging Product Strategy by HubSpot Senior PM. Thanks for having us, Product School. You can find more information about them at productschool.com. First, I'd like to give a quick introduction of myself and my journey. Hi, I'm Mike Carmeo. My pronouns are he, him. I'm US based out of Phoenix, Arizona, and I've been a product manager for the past five years, mostly in the SaaS marketing automation space. I started my journey back at Infusionsoft, a CRM and marketing automation platform for SMBs, really in a support role, which is where I grew my love for product and a deep empathy for users. I then went on to Active Campaign, another marketing automation platform as a PM, and then today I'm at HubSpot as a senior PM on our automation group, which is one of our core products here at HubSpot. Outside of product, I enjoy traveling, craft beer, live music, and spending time with family. And we'll jump in here. I'm really excited to talk about pricing and packaging strategy here today with you all. First, we're going to just take a look at really some main takeaways that we'll be sharing today. We'll start out with really paying the picture of what pricing and packaging looks like in today's landscape and really going over some myths that might be perceived when it comes to this topic. And then I'll walk you through a framework and some best practices that have really worked well for me in my experience that I'd love to share with you and hopefully you can find insightful and adopt. And really it's about connecting that framework with your product strategy and tying some of the levers that you might implement with a pricing or packaging change with your longer term strategy. So I mentioned we'll start out with really talking about what today's landscape looks like for pricing and packaging for your everyday product manager. So the first thing I want to cover is really this has been a huge perceived area that PMs don't own or don't have any influence in pricing and packaging. This is just simply not true. PMs do own a stake in the pricing and packaging strategy. You do have some influence over this area as you should. And really I just wanted to set that tone. That's a huge myth. I think that I've heard a lot in talking to other product folks really that just wanted to sort of debunk that myth. Next really it's about how pricing and packaging is ever evolving in today's market and us as product folks really need to keep up with that and stay in tune with what different frameworks or pricing packaging models might exist out there. We won't go too deep into this but there's a ton of resources out on the Internet of really different models that do exist today. And it's all about also leveraging the data that we do have as product folks which we likely have a lot of this data and insights at our fingertips today. And really it's about leveraging really what those insights tell us to help influence some of these packaging decisions. Whether it be product usage or actual direct feedback from users. A lot of that can really influence and help shape what our decisions are when it comes to pricing and packaging. And this is an area that I'll talk about really in the framework portion and is probably one of the most important steps. But it's also about defining objectives and setting some guardrails up front. Really what are the objectives that you're reaching for? Why are you doing this change? What outcomes are you reaching for? What's the expected ROI? And really communicating those decisions outward to stakeholders is key with any pricing and packaging restructure. And I touched on this briefly early on but these decisions should not be done alone. You as the PM should not be the superhero and try to take everything on for a project like this. It's just not realistic nor should it be the reality. You really should get inputs from a lot of different areas of the business whether that be other product counterparts, marketing, sales, leadership. If you have a product or analyst team really again it shouldn't be done alone. It's just not possible. And lastly aligning your strategy with pricing and packaging. The decisions that are made with your longer term product strategy is key. This next area I want to touch on really what are some key objectives? What is the why for why you're doing this change? It could be a number of reasons. It could be a single reason listed here. It really just depends. One of the more common areas and reasons for doing a change like this is typically customer driven. Whether it's a customer need or use case need that you're trying to fulfill. Also very commonly it can be a competitive play. Maybe there is a shift with a competitor. Maybe they recently did a pricing or repackaging change that you want to keep up with or get ahead of. Another one is a shift in the market. So this could be something like an economic change that occurred that really forced or was the best decision to change a price or change features on a certain tier. The next toggle is really growth driven. So it can be an acquisition or expansion play. Maybe you are trying to increase your base or adoption. On the flip side of that, it also can be a retention play. You're trying to retain existing customers. The next one is also quite common. It's more of a cost savings approach. So COGS, which is cost of goods sold could be another factor and influence some of these decisions. Some common examples of that could be database or cloud costs. Maybe you're trying to reduce AWS costs, that sort of thing. And then lastly, it could be just ultimately a strategic move that you're trying to do. I like to refer this as a chess move. Maybe you're doing this really to complement another product line or have some other play in motion down the road that you are doing this for. Next, we'll talk about really a recommended approach and framework that's worked well for me and that I would like to share with you today. Again, every organization, every product is different. So find what fits best for your needs. But here's a general framework that will be going over. First is the define phase. This is probably the most important phase, I would say, out of this framework and is the first one, of course. But it's really understanding the why. We mentioned about the objectives. Why are you doing this pricing or packaging change? What problems are we trying to solve for with it? Really clearly defining that up front and getting aligned with your team on this is really should be one of the first fundamental steps that you take. Looking at it through a customer lens or business lens, maybe again, there was a shift in the market or technology change that required this. And really defining what those milestones and success looks like. Who all needs to be involved? This really segues to the next phase and sets you up for success early on. Again, there's likely a lot of decision makers and input that needs to be involved throughout the business here that you should really take an inventory of up front. Guardrails. So this is another really important phase. And it's all about setting guardrails and best practices with your team and stakeholders up front. Whether that be what their responsibilities and expectations are, whether it be delivery expectations or what the rollout plan might generally be. Do you plan on having any sort of testing or beta phase? And really understanding what the documentation and communication standards are for the group. How are decisions going to be made? How are they going to be communicated? I know this is super critical, especially in a remote world that we're in today of really setting those guardrails up front so you don't lead to any misalignment or miscommunication down the road. Validate. So this next phase really is all about validating any key hypotheses that you might have around your approach. So this could be potentially, again, it could be customer driven. You could look at this from a competitive lens. I've often seen designer UX get involved at this point for concept validation. Maybe you're doing some really rapid experimentation. I've found success with that as well. And would really recommend doing some sort of concept validation during this time. And really what that evolves into, what that tells us is really what the options are. So that tells us, you know, what are the potential paths for this repackaging or pricing change? And what implications might that have, which really leads to forming your decision framework and what that ultimate final decision is, which is a good segue to this next phase of the decision phase, deciding really what the final recommendations are, clearly documenting and outlining what they are and communicating them outward to stakeholders around the organization. You might need some sign off, whether it be from leadership or at the executive level. So it's really critical to have things clearly documented, clearly defined about what certain features mean at a certain tier, that sort of thing. And then tying that to an updated like ROI analysis is always helpful, having that concept validation from the previous phase and really any of those findings to back up your final decision and support it. And this last phase is all about delivery. So it's all about once your final recommendation has been made and signed off and agreed upon, it's about scoping and delivering that with your teams, whether that be engineering, design, etc. And really after the build phase, it's all about starting to form your launch plan and getting enablement stakeholders prepared for any of these changes, whether that be frontline support reps or success sales that needs to be involved and aware. Marketing often comes into hand here as well, really trying to form your positioning and go to market plan. And then prepping any alpha or beta launch, whether that be customers, maybe you have a cohort of customers that are going to be testing the solution and giving feedback early on, and then really iterating on the process to refine it for general launch. So this is overall again, generally the framework that I have found helpful. Certainly mold this to your own organization and own product area, but hopefully this is helpful. I do want to zoom in though on this first phase that we talked about the definition phase and really one of the more important ones. And really narrowing in on how you connect this with your overall product strategy. I really like to go back to the why behind these changes again, really unpack the value drivers that influence your decisions. What's currently missing in your feature set that's influencing this change. What are users asking for or even willing to pay for I think with pricing and packaging a lot of it is just perceived value. So a lot of users may be willing to pay for something more that you might not be aware of. So it's really key on honing into there. Having a deep understanding of really what your goals are up front. And we'll talk about this next, but really what the levers are to help reach those goals and really understanding what the lifecycle and iterations that your product might go through with these changes. Maybe you plan on doing a slower rollout or iterating based on on how the market perceives it again with a small cohort or a beta group for example. But really comes down to thinking of how these changes really will impact your product strategy and the future and other product areas as well. It's important to think of the changes that I'm making. Are they going to impact another tool within the organization? Are they going to impact another product line really thinking through that and partnering with those other teams is critical and really helps also understand level of effort and what your feasibility for building looks like. So that's really what I wanted to call out here on this first phase. Hopefully this is helpful though. Alright, this next area I really wanted to tie some key objectives with some some levers and really that equates to helping really shape your product strategy a little bit more when it comes to packaging. We covered this early on but on the left is really the objectives the why won't go too deep into that again. Really it could be a customer need a competitive play a growth play strategic play that sort of thing cost savings for the business. But it's really comes down to tying what are the appropriate levers with those objectives and you may use one or multiple levers really to help achieve some of your goals. We'll talk about the levers here on the right. Some ones that I've seen and that I personally worked with feature edition. So again, maybe you are adding a net new feature to your packaging change and you also might be breaking out or evolving an existing feature. So that could be an addition. And then upgrade paths. This is another common one, especially in the SAS model that we see of having a lot of self service upgrade paths in app for the user to take advantage of and really inject interject in the buyer's journey. And what what the user experience is there. Feature removal. So this is really the opposite of feature edition right so it's if you're sunsetting something or maybe changing something with a current feature. That's that's common as well. And then trials and demo. This is another area that we're seeing a lot more of now so giving a user a taste or an appetite of something to entice them more. They see that the value moment right. They play around with a feature functionality and demo it and really, you know, that's where the perceived value might come in from them for them. Tier change so thinking through again maybe it's a strategic move maybe I am intentionally trying to change the value perception of a different higher tier or lower tier or even different tool or product line. Education this is another one that's up and coming that we're seeing a lot more especially in SAS of really interjecting education throughout the platform and giving expert recommended guidance as as a lever. So hopefully that was helpful. We are towards the end here I want to just sort of recap everything for you all. To sum up what pricing and packaging really is all about it's all about showing value right it's about showing value to your users. What are they receiving from it what are they willing to pay for more of and getting them to that aha moment. And to recap we covered really what today is pricing and packaging landscape looks like how it's ever evolving for for pms how we need to stay up to date with it and really aligning that with your strategy. So we covered the framework that I walked you through and setting some guardrails and best practices up front to help your decisions. And then connecting all of that together right and really trying to understand and decide on what are the key levers that you can pull to really help reach some of your goals and reach and align with your product strategy. So that was helpful. Again, I would recommend finding what works best for your product your org. It will vary, certainly based on your product type whether you're in a SAS model or some other product area. There are tons of resources out there that I have found. But if you do have any other questions, or would like to connect feel free to reach out on LinkedIn. Thank you so much school for having us and have a great day everyone. Thank you.