Four years of Pricing Transformation predictions from Kyle Poyar and Steven Forth
Steven Forth is a Managing Partner at Ibbaka. See his Skill Profile on Ibbaka Talent.
Beginning in 2020, Kyle Poyar from OpenView Ventures and Steven Forth from Ibbaka have been making predictions about how pricing will transform in the coming year. Our predictions for 2023 can out January 12. Here is a summary of how our predictions have evolved over five year.
It is interesting to see how the themes have changed over the years, and how some earlier themes are resurfacing.
Four years of predictions by Kyle and Steven
The strongest strand here is around Product Led Growth (PLG). The lead growth motion a company chooses for its go-to-market has a big impact on how pricing is designed and Product Led Growth has been attracting a lot of attention as a very scalable way for B2B SaaS companies to operate. Most Sales Led Growth companies are looking at how to layer in PLG and use it as a way to provide Product Qualified Leads (PQLs) to their sales teams.
Product Led Growth is also behind some of our other predictions. I have not shown the horizontal connections in the above sketch, but if I did I would note that Customer Experience (CX) is one of the key capabilities for PLG. One has to deliver a great CX to drive product adoption and there is strong evidence that CX increase pricing power. This is no longer a prediction as it is now a best practice.
See Customer Experience includes price and value
The most recent trend is around pricing and inflation (the full complex is Inflation - Higher Interest Rates - Recession). We saw this coming in 2022 and it will be a major consideration in 2023.
See Is SaaS price inflation a real thing?
The ways in which predictions influence each other over the years is also important. These are the dotted lines in the sketch. In 2023 many past predictions are coming together in a prediction that we are moving towards greater use of hybrid pricing.
Hybrid pricing refers to packaging and pricing designs that combine more than one pricing metric. The most common approaches combine a base subscription with a usage or value component.
See Usage based pricing is a complement and not a substitute
Looking forward, it is likely that AI will play a dominant role in pricing over the next decade, and that it will influence many future trends.
See How to price AI
Here are four years worth of predictions from Kyle and Steven.
