Mastering full-stack pricing: Insights from a decade in pricing strategy

This article is based on Brett Waldman’s brilliant interview with Farhan Manjiyani on the Pricing to Win podcast. Check it out here!

As a competitive intelligence specialist, having a solid understanding of pricing strategies is crucial. 

Having spent nearly a decade in the field, driving pricing and packaging strategies for companies like Citrix and Fireblocks, and now as the Director of Pricing and Packaging at Imprivata, I’ve garnered extensive experience and insights that I can’t wait to share with you. 

This article delves into:

• The concept of full-stack pricing, 
• The importance of cross-functional collaboration, 
• The operational aspects of pricing, 
• The value of market research, 
• And practical tips for competitive intelligence specialists.

Let’s get into it.

Understanding full-stack pricing

I like to think of my role as ‘full-stack pricing.’ 

Let me explain what I mean by that. 

When I think about full-stack pricing, I think about strategy, analytics, operations, and collaboration with product, product marketing, and RevOps teams. 

A lot of people think pricing is just about setting a price tag, but it's the culmination of a series of strategic steps, starting with understanding the market, analyzing data, operationalizing the strategy, and finally collaborating with product teams to ensure the pricing aligns with the overall value proposition.

In my experience, the actual price is the last step in the process. Before arriving at a price point, you must consider positioning, value, and how the product will be introduced to the market. This holistic approach ensures that pricing strategies are well-rounded and effective.

Where should pricing fit in an organization?

Over the years, I’ve had the opportunity to report to various functions within organizations, including marketing, finance, operations, and product. Each function has its pros and cons, but if I had to choose the ideal placement for pricing, it’d be under product marketing. 

Product marketing drives the positioning and messaging of a product, and they’re heavily involved in the new product introduction process. This alignment with product marketing ensures that pricing strategies are in sync with how the product is positioned in the market.

Are you trying to be a premium brand like Apple, or are you trying to be a low-cost competitor like Walmart or Amazon? 

How you position your product and how you go to market will drive your pricing strategy.

Aligning with the C-suite

Each executive – whether it's the CFO, CMO, or CEO – has different priorities. 

The CFO might focus on operational processes and costs, while the CMO emphasizes value positioning and market penetration. Understanding these different perspectives helps tailor the pricing strategy to meet the company's overall goals.

One key strategy is to ensure that the C-suite understands the importance of pricing. When I consider taking a job, I always assess whether there’s general alignment among the executive team regarding the significance of pricing. Without this agreement and buy-in, it’s hard to implement a successful pricing strategy.

Finding an executive sponsor and understanding what they care most about is a good idea. For example, if you’re reporting to the CFO, they might be more worried about the costs or the operational process. In contrast, a CMO might focus more on positioning and market strategy. This alignment helps ensure that the pricing strategy supports the broader company goals and metrics.

A three-step guide to making price changes

Do your market research

There's always the ideal state and then the reality when it comes to pricing changes. 

Ideally, you start with a hypothesis about what you're trying to do and what impact you think it'll have. Then, you want to do some market research, whether that's in-depth interviews or quantitative surveys. I like conjoint surveys when you have the time to think about the key trade-offs you want to focus on.

Once you've got that research done, you review the results and think about your packaging. If you have a good-better-best model, you need to consider questions like:

• Should this feature be in the "good" tier to get people into the product right away? 
• Should it be in the "better" or "best" tier? 

You need to think through these different trade-offs as you develop your go-to-market strategy.

Align with sales

Whether you're a product-led growth or sales-led company, it doesn't matter – you need to be talking to sales. 

They're the ones who have to reinforce the value messaging and positioning that your research has uncovered. If it doesn't resonate with sales, they're not going to reiterate it, and your plan will fail. You've got to get that feedback from this team.

Test your offerings

Then, you can move on to testing. 

How you test these offerings will differ depending on the company's size. At larger companies like Citrix, you might start with a smaller country, like Australia or New Zealand, where you can test different things without it leaking to other parts of the world. 

In a hyper-growth startup, you can roll things out across the board and tweak as you go. For example, at Fireblocks, when we were going through that hyper-growth phase, we didn't always have time to do all that research.

Sometimes, you just have to move fast and throw things out there to see what happens. As much as I love having data and doing research, reality will always be a little different from your plans.

But there's always a balance, as with everything in business. If you just go forward with testing without thinking things through, you can put yourself in a bind. At some point, you may need to take a step back, do some more interviews, and figure things out before you continue to iterate. 

The value of market research and data

I’m a firm believer that you can never have too much data. However, in reality, there are often constraints on the amount of research that can be done, especially in a startup environment. The goal is to gather enough good data to make informed decisions.

In my experience, even a few in-depth customer interviews can provide valuable insights. At Citrix, we often conducted four or five interviews with key customers to understand their needs and willingness to pay. While this may not be statistically significant, it provides a starting point for developing and testing a hypothesis in the market.

When it comes to market research, you can get by with fewer interviews, but only if you ask the right questions and talk to the right people. 

These interviews can give you a great place to start and help you formulate a hypothesis. However, it’s important to take the responses with a grain of salt and understand that they are just one piece of the puzzle.

Practical research tips for competitive intelligence specialists

Engaging with sales teams

For those just starting in pricing research or facing similar pricing challenges, my first piece of advice is to engage with the sales team. Salespeople are on the front lines and have valuable insights into what works and what doesn’t. They can provide feedback on pricing strategies and help identify potential issues early on.

Leveraging resources and building skills

Whether it’s through reading, attending workshops, or networking with other professionals, investing in your knowledge will pay off in the long run.

Some great resources for pricing strategy include "Monetizing Innovation" by Simon-Kucher & Partners and Kyle Poyar’s "Growth Unhinged" newsletter. These resources provide valuable insights and updates on industry trends, helping you stay informed and build your expertise.

The importance of involvement in new product introduction

Getting involved early

One of the biggest lessons I’ve learned is the importance of getting involved early in the new product introduction (NPI) process. Whether at Citrix (where I was the first Head of Pricing and had to transform how the company worked together) or at an early-stage startup like Fireblocks, being involved from the beginning is instrumental.

The earlier you can get involved with the product team, the better. It’s not about saying an idea is good or bad; it’s about understanding if customers are willing to pay for it. 

Sometimes, features are table stakes and other times, they can drive significant value. Being part of the NPI process allows you to help shape the product in a way that aligns with customer needs and this willingness to pay.

Building credibility with the product team

When I first took over pricing at Citrix, I did a bit of a world tour, meeting with product teams all over the country. During one meeting, a senior leader bluntly asked, “Who are you and why should I care?” This experience taught me the importance of clearly explaining my role, credentials, and the value I bring to the table. 

So, make sure to build credibility with the product team and position yourself as a collaborator who’s there to support their efforts and make product launches successful.

When you approach the product team, explain who you are and what you can do for them. Make it clear that you’re there to help, not to take over. Emphasize that you rely on their expertise and customer knowledge to shape effective pricing strategies. This collaborative approach fosters trust and ensures you’re brought in early in the NPI process.

The operational side of pricing

Strategy vs. implementation

A significant part of full-stack pricing is ensuring that the strategy you develop can be effectively implemented.

This often involves working closely with the revenue operations (RevOps) team to ensure that the systems in place can support the pricing model. Sometimes, you’ll need to adjust your strategy to meet the operational capabilities of your organization.

For instance, while at Fireblocks, we had to launch pricing changes rapidly. This meant sometimes making decisions with limited data and iterating based on feedback. In these cases, strong operational support was necessary to quickly adjust and implement changes without disrupting the workflow.

The role of RevOps

RevOps ensures that the systems and processes are in place to support the pricing models. This includes everything from billing systems to sales processes. Working closely with RevOps can help identify potential issues early and ensure the pricing strategy can be effectively implemented.

At Fireblocks, we often had to work closely with RevOps to ensure that our rapid iterations and changes could be supported operationally. This collaboration was key to quickly adapting to market needs and ensuring our pricing strategies were effective and executable.

Practical operational tips for competitive intelligence specialists

Engaging with stakeholders

Engaging with stakeholders includes the sales team and product managers, marketers, and executives. Each group can provide valuable insights and feedback that can help shape the pricing strategy.

When engaging with stakeholders, listening to and understanding their perspectives is important.

For example, the sales team can provide insights into customer preferences and objections, while product managers can share information about product capabilities and upcoming features. This holistic understanding helps ensure the pricing strategy aligns with the broader organizational goals.

Building strong relationships

Building strong relationships with key stakeholders involves regular communication, collaboration, and a willingness to understand their needs and concerns. By building these relationships, you can ensure that pricing is seen as a strategic function that adds value to the organization.

During my time at Citrix, building relationships with different product teams involved meeting with teams across the country, understanding their needs, and explaining how pricing could support their goals. This approach helped build credibility and ensured pricing was integrated into the broader strategy.

Final thoughts

Mastering full-stack pricing requires a comprehensive approach that includes strategy, analytics, operations, and collaboration with product marketing teams. 

By understanding the importance of these elements and integrating them into your pricing strategy, you can develop effective and adaptable pricing models. 

Remember, the key is to stay flexible, continuously gather and utilize data, and build strong cross-functional relationships within your organization.

Focus on collaboration, leveraging good data, and understanding the operational aspects of pricing. Then, you can develop strategies that drive value and support your company’s goals.