After multiple acquisitions, companies are often faced with pricing, packaging, and selling their combined offerings. This situation can present a range of issues, such as the sales team having varied capabilities and levels of preparedness to sell other solutions, pricing structures that differ across the companies, inconsistent price metrics, no combined pricing or discounting logic, and inadequate cross-sell and expansion motions for the combined company.
There are four key areas to consider when setting pricing and packaging for software roll-ups:
1. Determine How Best to Package the Combined Offerings
Although there is often a temptation for combined companies to package everything on a product basis, it’s important to recognize that new buyers do not think about your product in terms of a grouping of products; they’re looking for outcomes. From that perspective, understanding overlaps and complements of buyer segments in terms of outcomes can help you develop packaging and selling strategies to be effective beyond an a la carte approach. (Of course, a la carte can make sense in certain instances, depending on the need segments).
2. Reevaluate Price Metrics
For a newly combined organization, there is no better time to review price metrics being used across offerings. This is not only an opportunity to compare metrics to those of competitors, but a chance to examine why competitors may have chosen differently. This comparison can help illuminate what makes the most sense from a buyer or user value perspective. While price metrics don’t necessarily need to be identical across all solutions, it is important to consider how your new packaging may require new price metrics.
3. Assess Pricing Levels for the Offerings and Combinations
After settling on new packaging and price metrics, combined companies face a series of decisions to establish how pricing should change for the new offerings. One common oversimplification is to simply add the prices together, which can sometimes lead to very high prices. Questions to consider include:
- What are the new package prices?
- Should there be implicit discounts when buyers get a package with a combination of offerings previously sold as stand-alones?
- Are there services that need to be monetized explicitly as a stand-alone, or should they be packaged? What should the price be?
- How are implementation, integrations, training and other fees affected by the changes to the pricing and packaging?
- Are the add-on pricing options priced appropriately? If not, how should they change, and do they make sense when considered with the package prices?
4. Develop Sales Enablement Materials Specific to the Pricing Program
Having enablement materials that directly address key areas of change is critical to alignment when taking pricing updates to market.
- Articulate changes to the discovery process
- Provide updates to the positioning of the combined offerings
- Address frequently asked questions (both market-facing and internal questions)
- Provide packaging explanations illustrating movement along the package value continuum
- Prepare discounting and negotiation handling guidelines, including deal desk process updates
Carving out the time to address these four areas will help the combined companies as part of an overall integration approach. Diving into the details forces valuable conversations and decisions within the management team, and sets the course for moving forward with a combined go-to-market approach to pricing and packaging.