Customer value management (CVM) and Value Based Pricing (VBP) are joined at the hip. A good customer value management platform is the place where your value model, value stories and pricing model come together. A platform that covers only value or only price is trying to walk on one leg.

This key insight led Ibbaka to bundle together value models, value stories, and pricing models into one application. All four of our packages include value models, value stories, and pricing models plus the analytics you need to know how you are performing: Value to Customer (V2C) and the Value Capture Ratio (how much of the value you are delivering to customers is captured back in price).

What metrics does Ibbaka impact?

The key metrics that SaaS leaders are concerned with are the ones that SaaS leaders obsess over: Average Contract Value, Annual Recurring Revenue, and Net Revenue Retention. Another one that Ibbaka sees as critical is customer lifetime value (LTV or CTV).

One can only manage these metrics, and improve performance if one combines price and value.

Given these different sets of metrics we could have packaged Ibbaka by use case.

We decided not to do this and instead included all of the core functionality into each package to make sure that all of our clients get the full value of our CVM platform.

How is Ibbaka’s CVM packaged?

The key functions of a CVM platform are

• Value modeling - the ability to generate, manage and apply a quantitative estimate of the value delivered to customers

• Price modeling - the ability to represent, manage and apply the packaging and pricing model

• Storytelling - interactive tools to communicate value and to tell the story of how a solution makes the world better for the buyer and user

• Analytics - to understand how price and value interact through measurement of value to customer (V2C) and value capture in price (Value Ratio or Value Capture Ratio)

Each package or edition as we call them includes all of this functionality. The only differences are the number of models and stories included and the number of coaching hours.

The number of models aligns quite well with the typical stages a SaaS or Business AI company goes through as it scales.

• Foundation Edition: Allows almost any company to get started with a solid foundation. Ibbaka generates a value model, implements a pricing model, and uses these to create a compelling value story. For $9,000 per year ($750 per month) one gets a generated value model, one’s own pricing in a robust model, and a value story.

• Growth Edition: As companies grow they get more insight into their buyers and markets. They typically need more pricing models and need to tell their story in more than one way across the customer journey.

• Scale Edition: Most companies do not stick with just one product but move into adjacent spaces as they scale. As they scale they often need additional value models for different products or market segments. They also need to have more flexibility in how they price.

• Enterprise Edition: Large companies naturally have more products, serve more markets, and need more pricing models. The Enterprise Edition aligns with these needs.

How are those packages priced?

The Ibbaka CVM is priced per model. The price depends on the number of models used. That is all. There are no limits on the number of users, number of customers in the system, or value under management.

Why did we do this?

Ibbaka delivers value through models and stories. That is the pricing metric that most closely aligns with our key value metrics of value to customer (V2C) and value captured.

Customer Value Management can be used by many different business functions: the Chief Revenue Officer and other people in marketing and sales, the Chief Value Officer and people responsible for customer success, the Chief Product Officer and other people on the product team who are responsible for creating value. We did not want to put artificial barriers in the way of adoption and use by limiting the number of users.

Value to Customer delivered or Value Capture (impact on Gross Profit) were considered as these do track value, but they can be hard to predict in an emerging category like customer value management and value based pricing.

Value Model Generation

Earlier in January we introduced a new Foundation Edition at a price of US$9,000 per year. See Customer Value Management for Everyone.

We are able to do this, and to update value models multiple times over the course of a subscription, because of the success of our work with generative AI and value model generation (VMG) to create Generated Value Models (GVMs). This AI-driven process leverages Ibbaka’s deep reservoir of value models and value driver equations, a RAG (Retrieval Augmented Generation) architecture, prompt orchestration that allows us to use multiple different Large Language Models and Computational Models, and a GAN (Generative Adversarial Network) to evaluate the generated value models and introduce a continuous improvement loop.

Generative AI will completely change the Customer Value Management category over the next 24 months. Model quality will improve, models will become more adaptive, and many more models will be generated and used. By connecting model generation to story generation companies will be able to personalize value stories for each user and use case across the customer journey.

What additional services are available?

The use cases Ibbaka supports are used to define additional support packages. These solution packages map closely to the use cases.

These packages are only available to subscribers to the Ibbaka CVM platform. Some people come to Ibbaka for straight consulting but we no longer support this.

Why does Ibbaka require a CVM subscription before it will provide these services?

Ibbaka delivers value and pricing models through its software. A set of slides or a fancy spreadsheet will not get the job done. Most companies that go to a consultant for guidance on pricing struggle to implement the advice they are given.

Modern approaches to value and pricing require a platform to deliver. Without a platform, they get bogged down in misunderstandings, the proliferation of documents and versions, and process churn.

With a platform, value, and pricing are clear and connected, data is organized and actionable, and the claims made in value stories can be traced back to real data.

Value and pricing are not once-and-done. They need to be adaptive and evolve to respond to changing customer needs and market pressures. By staying with our customers across the length of the subscription (a minimum of one year) and providing ongoing updates to value and pricing we ensure that we are delivering ongoing value.

• Pricing and Packaging Optimization - For companies that want to redesign packaging and pricing and optimize prices in order to grow faster and more profitably.

• Value Based Sales - For companies adopting best practices in value based sales in order to increase Average Contract Value and Annual Recurring Revenue.

• Value Based Customer Success - For companies who want to document the value they provide to customers and drive higher renewals impacting Net Revenue Retention (NRR).

• Customer Migration - Taking a new pricing model to market is one of the more difficult things a company does. A Customer Value Management platform is a key enabler, and Ibbaka supports this process through analysis of data, customer segmentation, sequencing, and messaging.