who makes pricing decisions at your startup?

circling back to one of the main reasons i started esperanto growth strategies, pricing decisions tend to lack a clear process at young tech companies. for seed companies, it’s because pricing isn’t necessarily as important as your product market fit, though a bad pricing and packaging strategy (or no strategy at all) could derail your initial go-to-market efforts as well.

with so much going on at tech startups and with so many people wearing multiple hats, i’ve seen sales reps and sales leaders drive lots of pricing decisions. there are some clear benefits here. sales teams are the most important customer touchpoint, so they’re getting constant feedback on deals and can relay that data if the mechanisms are in place in your crm. they also could be gathering competitive intelligence as they navigate the deal cycle, though there could be misdirection from sly prospects.

the level of engagement by team should vary depending on your pricing model. if you have a usage-based pricing model, as an example, your product team will be involved because you’ll be measuring customer use. you’ll also get oodles of amazing data about how your product works. the same goes with volume-based pricing. regardless of model, however, the product team is your primary source for articulating the value proposition of various product features. you’ll need to provide regular product updates to prospects, customers and your sales team, which should come from product. esperanto growth strategies can help you build that feedback loop.

your marketing team should also have a role in setting and maintaining pricing and packaging strategy. they should be the hub of lots of customer and prospect insights, and you can leverage the segmentation work they’ve done for better targeted marketing campaigns. they also may be running your website and own all of the traffic data, which should give you insights into how prospects are interacting with the different pricing options on your website. if you are plg forward and offer freemium models, then your marketing and website analytics team should be your company’s pricing hub.

at the end of the day, however, pricing decisions should come down to the expertise you have at your disposal. in doing market research on the challenges companies face in creating a pricing strategy, some were fortunate to have members of the c-suite who had background in pricing and packaging. the company deferred to this leader and no one ever thought about it again. if you find yourself without someone with the right background, reach out at awork@esperantogrowth.com to start formulating a pricing decision-making strategy today.