Omer (00:11.840)
Welcome to another episode of the SaaS Podcast.
I'm your host, Omer Khan and this is the show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business.
This Week's episode is a story about a guy who decided to bootstrap a startup.
He cashed in his 401k retirement plan so he had enough to live on.
He wanted to use data and algorithms to help SaaS businesses figure out how to price their product instead of just going by gut feeling.
And he didn't really know what type of business he was going to create.
He just had a hunch that there was a business opportunity and was willing to take a risk.
We talk about the challenges he's faced, both professionally and personally in trying to launch and grow a startup, and specifically what he did in the early days to drive growth.
Today, his company now employs about 30 people and his customers include companies such as Wistia, BigCommerce, Optimizely, Zapier, and more.
His company is able to charge customers a minimum of $30,000 a month.
His background is in economics and math and in past roles he's worked with the U.S. intelligence Service and Google.
He's a super smart guy, but very down to earth and humble.
And in this episode he shares not only his story, but also provides a step by step process on how you can use the same strategies that he does with his customers to figure out your own pricing plans.
One thing you should know is that about halfway through the interview, his entire office block had a power cut which lasted hours.
So we had to resume the second half of this interview a few days later.
So I just wanted you to know that.
So when you're listening and you kind of wonder what happens halfway through now you know.
I hope you enjoyed the interview.
Today's guest is the co founder and CEO of Price Intelligently, a Boston based startup that helps SaaS businesses to come up with the right pricing strategy.
The company gathers data from multiple industry sources and uses its proprietary algorithms to help SaaS businesses figure out how much customers are willing to pay for each feature and how to optimize their overall pricing plans.
The company was founded in 2012 and has been bootstrapped from day one.
So today I'd like to welcome Patrick Campbell.
Patrick, welcome to the show.
Patrick Campbell (02:46.540)
Hey, nice.
Thanks for having me.
Appreciate it.
Omer (02:49.340)
Now let's start by kind of figuring out what makes you tick, what drives or motivates you to be an entrepreneur and work on your business.
Every day.
Is there a favorite quote maybe that you can share or just tell us in your own words what gets you out of bed every day?
Patrick Campbell (03:10.140)
Yeah, I think that's a great question.
I mean, where do I start?
I guess I think the biggest thing actually is a little bit different than I think what most.
Actually, I don't think it's that uncommon, but it's really.
I have a bit of a chip on my shoulder, to say the least.
I think I come from a very blue collar family where we were worried about strikes and things like that.
Being out of work when I was younger with my parents, and I think that kind of really created a little bit of a really hard work mentality around getting out of bed and making sure you put in a full day's work, whether it's working at an office or working on your own company, just making sure you really, really get things moving.
I think the other thing that kind of goes along with that is there's this speech by Teddy Roosevelt that he gave.
I think it was like in 1899 to the Chicago press corps or something like that.
And it's called.
I can't remember exactly what it's called.
It's like the doctrine of a strenuous life.
And he talks about how if you've been born with any means, and when he means means, he means basically whether it's middle class, upper class, whether you got to a good school, if you've been given any opportunity or any privilege, you have an opportunity and also an obligation to however you got that opportunity to really make something of yourself and give back to the universe.
Those two things really drive me and kind of keep me moving and give me a little bit of a good chip on my shoulder.
Omer (04:53.190)
That's great.
I was looking through your LinkedIn profile and it looked like earlier in your career, were you working for a nonprofit?
Patrick Campbell (05:02.470)
Yeah, that's.
Actually, no one really asks about that.
In college I was part of this, this organization where one of the.
It was a scholarship program and one of the requirements was you had to do volunteering for a certain amount of time during a semester, during the year.
It was really kind of interesting as I did some traditional kind of volunteering, helping out at a boys and girls club and helping out in some other places.
And then I thought, oh, it would be really interesting if I did my own thing because I started seeing some different holes in different organizations.
And I thought it'd be really interesting to kind of do my own thing and build my own nonprofit.
Essentially, I ended up building Bridgebrite, which we evolved a little bit.
We started off as kind of a little bit of an offshoot of Big Brothers, Big Sisters.
And then we evolved into actually doing more data and grant consulting for different organizations.
So getting grants and getting government money has become a lot tougher than it was 10, 15 years ago because everything's very data driven.
And a lot of these organizations, they just, they just don't collect data on how many kids they're serving or how many people they're helping with food and stuff like that.
We started giving back and basically giving free consulting to help them basically get their data in order so that they could get more grants.
I did that was not only in college, but a little bit outside of college.
And then I handed it off to a couple of different people because it became a little fragmented in a couple of different areas around the world.
I don't really get to talk about that much because no one asks about it.
So I'm glad you did.
Give me a little nostalgia here in terms of terms of college and all that kind of fun stuff.
Omer (06:54.400)
That's great.
So let's talk about price intelligently and where the idea for the product came from.
So how did you.
And I guess your co founder is Aaron, right?
Aaron White.
Patrick Campbell (07:08.320)
Yeah, Aaron.
And Christopher.
Christopher o' Donnell as well.
So I mean, really it was kind of funny because so my background's in econom and so I worked for the US Intelligence community out of college and I worked for Google for a little while as well, and at both places basically was doing econ modeling and creating different ways to find some sort of optimization through data.
I had an opportunity at a startup when I left Google that I worked at for about a year to work on pricing.
And I started utilizing some of these models to basically come up with better pricing for these folks.
And I started realizing how important pricing was.
And what's kind of cool is that these two other guys that ended up being my co founders, they also were working on pricing.
They were more hardcore product folks where I was a little more data and a little more biz dev focused.
So we linked up and basically, honestly it wasn't because we had this brilliant idea and we're like, oh my God, pricing is the next trillion dollar company.
It was more like I was like, there's something here.
There's definitely a market has a price and I don't like my job and I want to leave.
And so I've always wanted to try something.
And so we kind of jumped in and fortunately it's worked out so far and we'll see.
I'm sure it'll continue to work out so far in the future here.
But yeah, there's no stroke of genius or anything like that that really led to things.
Omer (08:43.310)
Well, lots of people have ideas all the time and they do nothing about it.
So what, what did you guys do?
What was the next action you took once you, you sort of realized that there was a potential opportunity here?
Patrick Campbell (08:59.160)
Yeah.
So really, I mean, I joke about it a little bit.
I think we, I typically, you know, in that case we kind of lucked into some of the next steps.
And so what I mean by that is we had, we built some basic models for measuring things like price elasticity and what's called relative preference analysis.
And we get into that and how people can do that on their own in a little bit.
But basically we had this software and we were like, all right, what do we do?
Well, let's go try and sell it as a traditional piece of software.
And so we did that and it was working and it was doing well, but no hyper growth or anything crazy.
And so we started really getting into marketing and doing the inbound Playbook.
HubSpot's in town.
We happened to get a free HubSpot instance.
And so we just started running the HubSpot playbook.
And all of a sudden we started getting folks who came to us and was basically like, hey, we really like the data, we really like what you're doing, but we don't want to do the work.
Can you do the work for us?
And we were like, okay.
And so we ended up becoming a little bit more of a tech enabled service where you have to buy our software and services together essentially to get stuff moving.
And so to answer your question a little bit more point blank, basically what we did is we started just pounding the pavement and doing the traditional customer development, starting to do basic marketing and then starting to get those first kernels of customers that we could start iterating the product and the whole piece of everything.
Omer (10:39.590)
On what kind of customer development did you do?
Patrick Campbell (10:44.990)
We started, interestingly enough, we started doing the things that we now do for other companies.
Pricing all comes down to what's called quantifying your buyer Personas.
What we started doing in terms of our customer development and we didn't have really, really high end values here at this point was we basically started asking them about their pain points, around what they were looking for in terms of help with pricing, their willingness to pay, around getting rid of the pricing problem off their backs.
Essentially different value propositions and things like that.
And it's kind of an interesting point because a lot of people and we work with all kinds of tech companies from Atlassian and Autodesk all the way down to growth stage startups along the entire stack.
A lot of times what we find is people try to really a B test their way out of things and when you're an early stage company, unless you hit some virality, you don't have any traffic to a B testing anything.
So it's one of those things where talking and having those really, really high profile and high surface area conversations with your customers or your potential customers really help shape who those customers are and where we're headed with them.
Omer (12:03.050)
So when I looked at your website, it wasn't clear to me initially whether Price Intelligently was a software product or if it was some kind of of productized consulting package.
Right.
Is like, I was like, is this a service these guys provide or is it actually a product that I, I sign up to?
So and as I got into it I there, there is a software product behind what you guys do.
But I'm curious like what led you to that path?
Like when people started saying to you, hey, you know, we want to do this and we, but we don't want to do the work.
Like it seems like just setting up some kind of consulting business would have been the obvious thing to do.
Or is that what you did do initially?
Patrick Campbell (12:54.510)
Yeah, it's essentially what we did.
I think what we found is we looked at the product and we're like, okay, in a reasonable amount of time and you know, we're reasonably intelligent people, are we going to be able to automate what we're doing in a productized way?
We looked at it and there were no obvious answers and we spent countless hours trying to figure out, all right, well what if we did this?
What if we hosted their pricing page?
What if we did all these different things?
It was one of those things where eventually the answer was just like, well, what if you just threw some people at it?
The way that we were pricing was basically in a manner that we didn't have to worry about getting horrible or good margins because margins were, we were able to price in a way that we were having better margins than a lot of SaaS companies just because of the nature of what we were doing.
What we did is we naturally went into, it's not quite consulting, it's more of a tech enabled service and it's a nuance that only I probably care about.
But the Reason I care about it is because what we're doing is you can't just hire us to talk to you or give you advice or look at your data.
It's like you have to use our software and you have to buy service on top of it.
What we've done since then is we launched something called ProfitWell about two years ago, which is a free tool to get your SaaS metrics, and it plugs right into your billing system.
We're the only one in the market that's free, the only one on the market that's 100% accurate.
What that's allowed us to do is we now have more of a central traditional software place that we're starting to fuse both the Price Intelligently service and more productized service onto that platform.
So that eventually, within probably the next 18 months, every single person who works with Price Intelligently will have a software instance of our product that they can use.
And it'll feel a lot more software y, but there still will probably be a human element to it.
Omer (15:04.230)
Let's talk a little bit about the product.
Patrick Campbell (15:07.430)
Sure.
Omer (15:08.230)
Just explain to me, like, how it actually works.
So in the intro, I talked about how you gather data from multiple sources and then you use your own proprietary algorithm to come up with these recommendations.
But what else is going on?
Like, where do you get these data sources from to start with?
Patrick Campbell (15:26.950)
Yeah, that's a great question.
So the way our software works, and frankly this is you can use different models and not even use our software to get some of this data or similar data.
But typically what you find with pricing is that the only person who can really tell you willingness to pay what they want in terms of packaging and even their positioning is really around that actual customer.
The way that our software works and the way that some of these econ models work is basically you actually go to your customer and through survey data, collect survey data in the right way, whether it's around figuring out willingness to pay or figuring out which pieces of the product are most and least preferred, and basically plugging that data, cleansing it through an algorithm, and then getting things like price elasticity or relative preference data.
What that allows you to do is essentially go directly from the customer and understand where they're looking in terms of how they feel and how they value your product in particular.
Omer (16:31.440)
Okay, tell me about the size of the company.
How many people do you have working there right now?
Patrick Campbell (16:38.320)
Right now, I believe we.
We just accepted an offer on number 30.
And so we're growing, and I think we were only about 14, nine months ago.
So it's been a little crazy in terms of growth, but yes, that's kind of where we're at.
And I don't know, I'm flabbergasted even just saying that based on where we were just a year ago, even.
Omer (17:04.190)
All right, so you guys launched in 2012 and it's 2000, coming to the end of 2016 now and you have 30 employees.
Just give us a sense of the growth trajectory in terms of employees.
What did the first couple of years look like and what were you doing to grow the business?
Patrick Campbell (17:33.840)
Yeah, that's a great question.
I think so for the first nine months it was just me, just me working full time.
And I think it was, you know, that was a bit of a mistake.
Right.
I think there's plenty of folks out there, you know, listening, I'm sure, who are trudging along on their own and I think it's one of those things where it's definitely doable, but it puts a lot of fatigue and a lot of like, you know, wishing on luck essentially to make sure you succeed just because, you know there's two heads better than one.
And you know, three founders are better than, than one as well.
It wasn't to say my part time co founders were helping a lot.
It was just one of those things where three full time people would have been great but we got lucky.
Hopefully, or I'll characterize it as luck.
There's a lot of hard work where we were just pounding the pavement in terms of inbound.
Then nine months in we hired Peter Zotto who's our GM of the price intelligently side I think we got again, call it luck, but we got really lucky with Peter in particular who came on board and really allowed us to start to hire out sales organization and services organization.
What was really interesting in the first two years we had no full time engineering or product talent.
We were very fortunate that our product was not customer facing because the data is really what people were after.
So we didn't and didn't have a software product to give them for that data.
It was more just kind of interface through different reporting.
And so we didn't really need someone full time.
And then a lot of the growth was really coming from inbound.
I mean our content has driven, I would say 80 to 90% of the revenue so far in the business.
And that really really helped us kind of continue down a path of being able to hire and made a lot of classic hiring mistakes, hiring for right now versus the right person or the person who's going to sc.
I think everyone kind of has to make that mistake, even though we've heard it all too many times at this point.
But overall, I think it was one of those things that about two years in we were trying to figure out really how we scaled the business that really was going to be through more software.
We brought on a cpo and then now at this point, four and a half years in, we have basically half the company's engineering and product and the other half is sales and account management.
At this point it's a little bit.
There's plenty of details in between there, of course, but it's just one of those things where it's definitely been a grind.
There was no like, oh, we just hired 10 people in two months.
It was just like adding the right person every month or so.
Omer (20:20.450)
Who was doing the inbound marketing in those first nine months, Was that you?
Patrick Campbell (20:26.770)
Yeah.
So frankly, it still is me.
We finally, for the first time in the history of the company, have a full time director of marketing coming on on Monday.
So it's a little ironic saying, oh, this is where most of our revenue comes from, but we still didn't have someone dedicated to was just really hard.
And it was probably mostly on me just not being comfortable with anyone that we interviewed for my own paranoid reasons.
But it was really hard and it was a really protective role finding someone that we felt was really going to do a good job.
And so we had different contractors here and there, we had different content marketers here and there.
Really, it was me throughout this whole time period.
And now, because we're trying to scale even, even bigger, we're absolutely going to need to get some heavier talent there.
Omer (21:17.040)
So what were the kind of things that you were doing with Inbound?
Were you mostly blogging or were there other things that you did in those nine months?
I'm trying to figure out like it's just you full time for nine months and at the end of the nine months you're in a place where you can hire a full time GM to come on.
So either you guys as co founders put in a lot of money into bootstrapping the business and being able to pay people, or you did some pretty good stuff in those nine months to be able to generate enough revenue.
And I'm sort of.
Which one was it?
Patrick Campbell (21:50.690)
Yeah, it was definitely the latter.
We didn't.
There was no money put in.
I cashed out my 401k to survive for those nine months essentially.
And it wasn't a big four 401k, because it wasn't at Google that long.
Because of this kind of hybrid managed model, this managed service model, we were able to get some good revenue coming through the door in the first few months.
It was one of those things where I think we closed our first six months with about $130,000 in revenue.
It was one of those things where all of a sudden we could start afford to hire someone.
I think we were a little conserv.
It wasn't theoretically we could have hired a couple of people with that in terms of Runway if I was going to continue.
And I didn't get paid really anything until really last year, frankly.
Definitely enough to survive, but not a decent salary until last year.
It was one of those things where we grew pretty slow.
And that was, in hindsight, maybe not the best decision.
But at the time, I think it made sense for us to grow through our own revenue.
Omer (23:02.750)
So what were you doing blogging?
Was that your main kind of content marketing?
Patrick Campbell (23:07.230)
Yeah, just.
Oh, yeah, that's right.
Sorry, I know you asked that.
Yeah, just straight up blogging.
I mean, and it was.
It was one of those things where like, I guarantee you, if we were smarter, you know, in terms of like, you know.
Oh, like, you know, if we were, you know, growth hackers, you know, early on or something like that, we would not have.
We probably wouldn't have continued blogging just because, like, it took like a good number of months before all of a sudden we started getting this nice flywhee of leads coming in.
I mean, we would write.
I would spend an enormous amount of time on a blog post that is deep because we don't write listicle content.
We write really deep posts.
And I'd get 30 views on it.
I think I was like, all right, this is just part of the experience and part of grinding away.
Those posts eventually would get more and more and they became really good deep content.
But overall it was one of these things where, yeah, it was definitely a grind to get those first leads and get those first lists going.
Omer (24:07.220)
You mentioned the HubSpot playbook earlier.
For people who are not familiar with that.
Can you just explain what that is and how you use that?
Patrick Campbell (24:17.460)
Yeah, absolutely.
So HubSpot, just to start real basic, it's a marketing automation platform.
The Playbook, what I refer to is basically having an offer, in our case it was an ebook on pricing strategy and then also having an offer for.
Which is for us, it's like a middle to bottom of the funnel offer.
It's called a price optimization assessment.
And then basically using those offers or driving leads to those offers through content, writing a blog post and then taking that blog post and atomizing it down to Twitter links, LinkedIn links, stuff like that, and then using that content to basically drive leads.
And then once you get those leads, following up on those leads and getting them on the phone, if they're qualified, and taking them down your sales funnel.
So that's kind of what I mean by the HubSpot Playbook.
And it's evolved since then to be a little more complicated than that.
But that's really what we were doing in the beginning.
Just like, hey, here's a piece of content.
Want to learn more?
Download this ebook.
And then they get an email from me to get on a call, and we get on the call and we basically talk about pricing and then kind of evolve from there.
Omer (25:27.840)
Got it.
So you were using the Playbook as kind of a framework to say, this is what our inbound marketing strategy is going to look like.
And I'm just going to execute each of these steps that the Playbook kind of calls out.
And it sounds like you kind of experience what a lot of people do, which is you initially write blog posts or create content, and you just think, oh, my God, was it worth it?
Right.
I mean, I had, like, 10 people look at it.
And then over time, if you continue with that and you're sort of regularly and consistently creating this content, I think the analogy used of a flywheel is so accurate because that's exactly what happens.
Right.
You start to build this momentum, and it doesn't seem that hard as it used to before.
And you're also motivated because you're seeing better results coming from everything that you're creating, right?
Patrick Campbell (26:19.240)
Yeah, absolutely.
And I think it's a lot of people, they do give up early on.
And I think it's one of those things where it's painful to watch, because if they just did the next post, like the next post was going to go to the top of the page on Hacker News, and they just decided to give up, which is typically the wrong thing to do.
Because content, it's a compounding channel or process.
It's not something you're going to see instant results out of of.
Omer (26:48.210)
From what I understand, you also went through some.
Some health challenges while you were building this.
This business.
What was going on there was.
Was that just kind of getting burned out by just working too much.
Patrick Campbell (27:07.650)
Yeah.
So there were.
There was actually two big ones.
I mean, one like.
I mean, my health, I, you know, sacrificed it.
You Know, I don't saying sacrifice makes me sound like a martyr.
I think just stopped essentially really going to the gym, eating well and you know how it is when you're working 18 hour days or long days.
And the easiest thing to give up and hey, I need to write that next blog post is the gym or going and preparing food rather than ordering takeout or something like that.
And so for me, it definitely took a hit and definitely got burnt out multiple times.
I mean it's tough and it's not complaining or anything.
It's just more of.
It's something that I need to be more cognizant of.
And thankfully now as we're starting to reach a decent size and capacity, we're starting I can take a day where I don't have to work those 18 hours, of course, and there's still long days, but it's not something that's constant.
I can trust the team and trust things out.
There was another, I mean there was actually most recently and haven't really talked about this much, but actually also went through a bout with cancer during the company as well.
And that was if that happened early days when I didn't have health insurance, I would have been totally screwed.
But I guess thankfully, in a kind of silver lining way, went through that
Omer (28:39.510)
about
Patrick Campbell (28:41.830)
just under a year ago and everything's great now, everything's good in remission, that kind of stuff.
And thankfully caught really nice and early and everything.
But it's one of those things where I think you got to take care of yourself and you got to play the long game.
I guess that's the biggest piece of advice I'd give on that side of the coin.
Omer (29:03.250)
Well, I'm very glad to hear that you kind of beat that kind of struggle with cancer and kind of came through and you're all clear.
So that's good stuff.
All right, so what I'd love to do is to.
Let's think about a founder who is listening to this episode right now.
Maybe they don't have the budget yet to go and hire someone like a price intelligently to help them come up with their pricing strategy.
So what I'd love to do is to be able to pick your brain and say let's give them an overview of how to come up with a pricing strategy and then to walk through that process and talk about some of the specific actionable things that they can do to.
To do a better job at coming up with the right plans for this as product.
Patrick Campbell (30:11.630)
Yeah, definitely.
I think overall it really comes down to A few different steps.
And I think the most central one, and really where all the other steps revolve around, is defining and quantifying your buyer Personas.
So when I talk about buyer Personas, and a lot of people have written about buyer Personas for more than a decade now, but it's really getting a couple of different profiles of the different types of customers that you're going to target.
And the reason that these are so important is because everything that you're doing is basically leading to forcing that buyer into a purchasing decision, or coaxing them into a purchasing decision, or justifying the price.
And so normally what we recommend doing is first just on a sheet of paper, Excel spreadsheet, something putting down what those three different or five different types of people that you're going to target.
There's a couple of ways to slice and dice them, but it might be role.
So you might be selling to sales Susie and marketing Mary.
It could be size, it could be Enterprise Eddie and mid Market Marvin or something like that.
But basically figure out what those profiles are.
And that's essentially the first step.
And then the second step is to validate or invalidate those hypotheses that you have about those particular buyers.
And so with pricing in particular, there's a couple of different types of data that you're really looking for.
One is demographic data, just because you want to a lot about those particular buyers.
And this doesn't necessarily mean things like gender, age, unless you're in a B2C environment.
But if you're in a B2B environment, it might be things like size of the company, size of the team, etc.
The other two pieces of information you really want to collect are feature or relative value on features or value propositions.
So this is just a jargony way to say, like, what do they want out of the product?
What don't they care about the product?
And then third and, and almost actually easy ironically to collect is the pricing data.
And so to collect that feature value data, that relative preference data, what we typically recommend is basically setting up a survey and forcing them, them being your buyer or your potential buyer, to make a decision.
And so instead of asking them, hey, I have these four features, what do you think about them?
Or rank each of them on a scale of 1 to 10, basically show them the four features and you say, hey, which of these is the most important to you?
And which of these is the least important to you?
And I can send over some additional information that shows you how to actually calculate this data.
And get some nice, really good visuals out of it.
But basically that starts to help you figure out what your packaging should look like.
So for buyer Persona A, like, what do we need to make sure that that package or that product has?
And same thing for B and C. And on the pricing side, it's actually, as I alluded to, to it's ironically pretty easy to collect.
And it basically is just a function of asking the right questions.
And so rather than asking someone point blank, how much are you willing to pay for this, you'd instead ask, at what point is this product?
Maybe it's at what monthly price is this product way too expensive that you would never consider purchasing it?
At what point is it getting expensive that you consider purchasing it?
At what point is it a really good deal?
And sometimes, most importantly, at what point is it too cheap that you question the quality of it?
If you start to graph those answers and kind of calculate those answers a bit, you start to get a really, really good look into price elasticity, and you're quantifying that buyer even more.
And so at the end of this exercise, once you've collected this data and kind of put it into that spreadsheet or whatever, that piece of paper you're using to kind of catalog these buyers, all of a sudden you have a really, really good look at what these three different buyers are really caring about, what they don't care about, what their willingness to pay is for your particular product.
And then ultimately you can start to make some decisions.
And that's the third step here, is basically picking who you're going to target with that buyer and then formulating your pricing strategy based off that.
So if buyer A cares about, you know, doesn't really care about much, just cares about the core product and is willing to pay 50 bucks a month, then your first tier is going to include that core product, and it's going to be 50 bucks a month.
And then buyer B might care about the core product plus things like integrations and analytics, and is willing to pay 100 bucks per month.
And then all of a sudden, you have buyer B's tier.
And so it's one of those things where all of a sudden you've kind of cut through all the crap, as we say, you figured out what that buyer really cares about, and you've kind of aligned those particular buyers to your pricing strategy.
And then the final step is just to make this part of a process, because your buyer is going to be constantly changing, your competitors are going to be changing your product's going to be changing.
And ultimately you want to make sure that you're keeping a pulse of that particular buyer every single quarter or every six months.
So you can kind of collect this data and make sure that you're optimizing your pricing strategy just like you're optimizing your product or even your customer development.
So there's a lot of different nuances, but that's kind of the core, core of what you need to focus on.
And you know, ultimately there's, there's no magic formula.
It just takes a bit of work.
And fortunately, the work that you're doing is also going to pay dividends for, you know, product development and marketing development, because all of a sudden you're going to know who you're going to sell to and ultimately what their willingness to pay looks like.
So you can align your entire funnel to that particular buyer.
Omer (35:38.480)
Okay, so I want to go back to what you started out with, which was the buyer Persona.
And you're right.
There is a lot of material, you know, out there on the web talking about Personas, but it sounds, it sounds like at this point you're saying it can be a simple one page summary or kind of a one page summary of all your potential buyer Personas.
You're not trying to write, write a biography on each, each Persona.
You're simply trying to figure out if you had to classify your customers into three, four or five different types of customers, what would those classifications look like?
What?
Either it could be based on the role, as you said, whether it's somebody in the marketing department versus somebody who in sales.
It could be based on the size of a business in terms of maybe we have one person.
We have, we have, you know, consultants who use this product, and we also have small teams of five to 10 people who use it and each of their needs are going to be different.
And so the whole idea, from what I understood what you said, was you want to do that because then, then by having those, each individual Persona, you're going to be able to drive that towards a specific sales outcome.
Did I get that right?
Patrick Campbell (37:18.460)
Yeah, exactly.
And the biggest piece, and I think you might be going into this next, is that you can't just get in a room and just write down what you think you know something about your buyer.
Don't get me wrong, but most of the time you have to actually go to the source and collect data, whether it's qualitative or quantitative, to really figure out what's making that buyer tick so that you can align that not only for your business, but ultimately your pricing strategy.
Omer (37:47.390)
Now, the survey that you talked about, is that something that you would recommend doing only with existing customers or prospective customers, or both, or does it not matter?
Patrick Campbell (38:01.310)
Yeah, that's a great question.
Ideally, you want to do three different sources.
And when you're just starting off like I would always recommend, just, like, start really small.
Like, maybe just send a pricing survey to your current customers, or maybe just send one of those relative preference surveys to your current customers.
But in an ideal world, you're collecting from current customers, your prospects.
So these are people who have heard of you but haven't converted, and then essentially your target customer who has never heard of you.
And so the way you can source that last one is that there are these companies that are called market panel providers that can get you anyone from a soccer mom in the middle of Kansas or a soccer dad in the middle of Kansas all the way to a Fortune 500 CIO.
And that allows you to look at.
Okay, for people who haven't heard of us and people haven't used our product, here's what they're thinking.
For people who are not using our product but have heard of us, here's what they're thinking.
Then people who have heard of us and are using the product, here's what they're thinking.
And theoretically, all three of them should be giving you different answers, because once you get your branding in there, your pricing willingness to pay should be higher.
And then once you're in your product, the value and the willingness to pay should be a lot more malleable as well.
Omer (39:19.390)
Now, you mentioned two things that I picked up on the survey.
One was asking about features and which feature they would find the most valuable versus which one they would find the least valuable.
And the second part of it was around the price.
In terms of what price would you not consider this product through to the other end of the scale, which would be what price would be too low that you might start to question the quality of this product.
So, kind of going back to the features, when we're thinking about designing a survey to ask that question,
Patrick Campbell (40:07.730)
how are
Omer (40:08.010)
we coming up with those features?
What are the features we're looking for?
Are they based on relative price that we think people are willing to pay, or just how would somebody come up with those potential answers?
Patrick Campbell (40:21.890)
Yeah, good question.
I think it's a little bit dependent on what you're trying to achieve.
If you're just doing your baseline like you've never done your pricing before, typically what we recommend is look at anything that you would differentiate.
So in an extreme example, it's not like you would differentiate the ability to log in to the product.
Right.
You know, that's a feature you don't have to ask about.
Whereas for your product, you might differentiate things like support, analytics, integrations, and maybe some aspects of the core product.
And so we recommend kind of starting with those main kind of differentiable features that you have, whether you differentiating on them now or you have some sort of inkling that you might differentiate in the future.
And so if I'm looking at support, integrations, analytics, and your core features, those are four things that you kind of look at to make sure that you're kind of parsing together and asking those questions about when you want to get a little more complicated.
What you can do is you can, and this is a little bit hard to kind of visualize on a podcast, but what you can start to do is actually break each of those main features down.
So, so instead of just asking about support versus analytics versus integrations, you might ask about live chat versus phone versus a dedicated account manager, the different pieces of support.
And that would be a separate question that would allow you to figure out, well, hey, if people really, really want support or better support or they really value support, what aspect of support are they really looking for?
And you can, you know, you can also compare and contrast things like just your roadmap.
So maybe you're not differentiating anything and you just want to figure out what piece of your roadmap should you build next.
That's another way you can use this product, even though it's not really.
Or this methodology, I should say, it's.
Even though it's not really a, you know, pricing function or even your value propositions, you know, you're.
You're kind of comparing and contrasting what you're going to put on the, you know, H1 of your homepage.
Basically, you can kind of compare and contrast what those look like amongst your customers.
So, long story short, the big thing is that it's a tool where you can use to compare value amongst your different Personas.
And ultimately it's one of those things where you can use it to your benefit depending on kind of what stage you're at.
Omer (42:48.220)
Okay, so the goal at this point with asking the question about the features is to figure out what features or functionality each buyer Persona finds the most valuable.
Is that what we're trying to do?
Patrick Campbell (43:08.050)
Yep.
And in some cases, the least valuable too.
You know, if you all, if you think analytics is the most important thing, but Your customers come back and everyone thinks it's, you know, the least valuable.
It's really insightful to make sure that you maybe don't spend as much time building that or advertising that of marketing that.
Omer (43:26.430)
Yeah.
As in terms of the pricing where from what I understand, we're trying to give people a range to sort of figure out what, what is the, the highest possible price this, this buyer group would consider versus what price would be basically too cheap, where they would start to question whether it was right for them or they would question the quality of the product.
The two questions for you there is, number one is like how do you sort of initially come up with that price range?
And also when you ask that question, is it better to ask that, give them a, as an open question where they just give you a number or are you giving them some kind of multiple choice kind of options on what possible answers could be for each of those questions?
Patrick Campbell (44:32.360)
Yeah, so actually we recommend just going wide open range.
And the reason for that is because like human beings and the reason that these questions work so well is that we think about value very much in a spectrum.
And so we know that for instance, the computer in front of us is more expensive than the glass of water we might be drinking from.
And because of that value being on that spectrum, we don't want to anchor them in a particular point at a particular point, mainly because the value that they might see in the product may be very, very different than the value that we think is in the product.
So what we recommend doing is actually when you're asking these questions, at what point is this way too expensive?
At what point is this too cheap?
Actually keep it open ended because that's also going to give you a really, really nice look at the elasticity of those particular users as well.
And so, yeah, we would recommend keeping it open ended.
Omer (45:29.430)
Okay, so let's say we've done the survey and we have this data back.
What are your sort of guidelines on how to analyze that data?
What are we looking for and what sort of outcome are we trying to get to?
Patrick Campbell (45:51.570)
You know, it's tough because every data output's a little bit different, but really when you're looking at the relative preference data, you're going to be looking for the biggest differences between these different types of Personas.
And if there are no differences, meaning everyone kind of cares about all the same things, then you open yourself up to, you know, basically having a, you know, a non differentiated pricing schema.
Right.
Where might be you give all the features away to everyone but you differentiate on some sort of what's called a value metric.
So maybe per user, per visit, per X, Y or Z.
On the pricing side, you're really one.
You want to make sure that you can expect a good lifetime value for that particular customer.
And so I can't tell you the number of times where we see a particular customer going after one of their particular customers and they find out that that customer just isn't worth what they think that customer is worth because they don't see the value in the product.
And so those are kind of the first two pieces.
And then as you start to dig down the rabbit hole a little bit, you want to start figuring out, as you look at this price elasticity data, where you should be priced for these particular Personas and you can start to peg your tiers based on where their willingness to pay is.
So if you're separating your Personas in small, medium and large, all the of a sudden you can have a small tier, a medium tier and a large tier.
If you're separating them on role, it might be a little bit more complicated, but you might have a sales package, a marketing package, and a project manager package.
But really once you start to see this data, you'll find that there isn't necessarily a picture perfect answer, but there's definitely these trends that you'll start to see that will guide where you put the different puzzle pieces to set up your project pricing.
Omer (47:42.030)
Okay, good.
That's useful stuff.
Now one of the things you mentioned was doing this not, not, not sort of thinking of this as a one off exercise, but doing it regularly.
Why?
Why is that important?
Patrick Campbell (47:59.230)
Yeah, it's, it's particularly important because there are, if you think about, just, just imagine, imagine your customer never changes, your competition never changes, and the market never changes.
Which three things that are never true.
Right.
Even if that's the case, your product is theoretically going to be constantly improving, whether it's in terms of brand.
You just get better looking because you start to sign some big clients and all of a sudden you start to become the brand for X, Y or Z.
Or just because you start, start adding features or start fixing features or doing a number of different things.
And so because your price is the measure of the exchange, it's like the exchange rate on the value that you're creating.
It's the actual representation of the value that you've created.
You want to make sure that you're keeping ahead of that particular value so that you can start to take advantage of those different improvements that you're Making in order to monetize better.
And so even now, if we take those imaginary assumptions off, the market's going to constantly be changing.
Your competitors and your customers are going to be changing and what they need.
If you keep the pulse of what your customers are looking for in terms of value, you can stay ahead of the curve and ultimately make sure that you're pricing properly.
We have just a number of people that we know who.
They haven't changed their prices in 10 years.
And what's crazy about that is that it's 10 years of lost opportunity.
And, yeah, we can change your prices now, but all of a sudden it's like if their prices were changed incrementally 10 years ago, they would have made so much more.
They would be in such a different place, and they wouldn't have anchored their customers at such a low price, even though they're giving away oodles and oodles of value.
Omer (49:46.550)
Yeah, and I guess that's the other thing as well, is if you leave it for so long, it becomes really hard.
Hard to increase your prices even if you've added a ton of value to the product.
As you said, people are anchored at a specific price, and you've kind of trained them for years that this is what you're going to keep paying.
So I guess that's another good reason to do that.
Okay, great advice.
Thank you for sharing that.
Patrick, it's time for our lightning round.
I'm going to ask you a series of questions.
Just answer them as quickly as.
As you can.
Ready?
Patrick Campbell (50:19.160)
Cool.
Let's do it.
Oh, do I have to answer?
I have to answer them really quickly.
Okay, let's do it.
Omer (50:25.880)
All right, so what's the best piece of business advice that you've ever received?
Patrick Campbell (50:32.200)
Oh, gosh.
Now I was, like, really excited to go really quickly.
Oh, my gosh.
I have, like, so many pieces.
We'll go with success is a byproduct of excellence.
Just do well and success will come.
Omer (50:46.880)
What book would you recommend to our audience and why?
Patrick Campbell (50:53.760)
Wow, I'm a really bad lightning round participant.
I should not be on a game show just realizing that now.
I'm like, all of a sudden the first thing that comes to mind.
I'm like, well, no, it's bad because of this.
There's a book called Influence.
I can't remember what it is, but it kind of talks about, like, the psychology of Persuasion.
I think that's actually the subtitle, the Psychology of Persuasion.
The reason I would recommend it is because I think communication is something that is really, really underestimated in terms of how powerful it is in business.
And I think more people should study how they communicate, whether it's through blogs, emails, speeches, phone calls, etc.
Omer (51:34.110)
What's one attribute or characteristic in your mind of a successful entrepreneur?
Patrick Campbell (51:37.810)
Entrepreneur Grit, I think.
And I mean like actual grit.
I know a lot of people talk about the Hustle and all this other stuff, but I think a lot of people don't know what like, resilience is.
So maybe I changed my answer to resilience.
I think, you know, even if everything goes perfectly for you, it's going to be an exorbitant amount of stress and hard work.
And so, I mean, resilience is probably the number one thing I think that I see in terms of successful founders versus those who are failing.
Omer (52:06.120)
What's your favorite personal productivity tool or habit?
Patrick Campbell (52:14.200)
So I think I would go with habit.
So I meditate every day, and I was a huge, like, cynic when it came to meditation.
I read a book called 10% happier, which I think is another book that everyone should read, especially if you're cynical about, like, meditation, because it really kind of brought me around and meditation gives me what I like to call an extra second.
So if I'm, you know, if it's something that normally would like, really stress me out or get me angry or, you know, would get me too excited, it gives me an extra second to kind of level set my emotions when reacting to things.
And I think that's what I can attribute it to.
Omer (52:50.070)
I meditate too, so you're preaching to the choir.
Patrick Campbell (52:52.710)
Awesome.
Omer (52:53.430)
What's a new business idea that you'd love to pursue if you had the extra, extra time?
Patrick Campbell (52:59.190)
Quilting.
The quilting market.
And I'm 100% serious about that, so.
Omer (53:03.190)
Really?
Patrick Campbell (53:04.550)
Yeah, so.
And it's one that I've kind of known for a while because my mom, like, I'm from the Midwest in the States, and so she's, she's like a hardcore quilter.
That's her hobby.
And quilting, for those of you don't know, that's like, it's what your grandma, like, if she made you a blanket when you were a kid or a baby or when you're an adult, that's what, you know, quilting is making blankets.
And it's kind of funny because it's, it's a $4 billion a year industry.
There are no modern companies in it.
It's all these old school, 20, 30 year old companies.
And then the average median or the median household Income of a quilting family is like 130,000 a year.
They spend, like $6,000 a year on quilting supplies.
And then they also, like, 99% of them are on Facebook, even though they're all, like, an older quilt crowd, skewed very heavily towards.
Towards, you know, towards women.
And so if I wasn't.
If I wasn't doing Price intelligently and not doing something like, you know, super sexy, like space or something, AI or crazy, I would.
I think I would be totally into the quilting market.
Omer (54:07.530)
What's an interesting or fun fact about you that most people don't know?
Patrick Campbell (54:12.490)
Ooh, that one's tough, because I try to keep as open book as possible.
Omer (54:21.270)
Okay, what's an interesting or fun fact
Patrick Campbell (54:22.870)
about you that people do know or less people know?
I'm trying to think of a good one.
I can think of, like, little fun ones, but, Oh, like, you know, one that's, like, the team knows, because I think I wax nostalgia about it way too much.
So I'm actually a national champion debater, so I went to the college I went to on a debate scholarship, and so it was one of those things where I basically practiced debate and speech, as it's called, for about 40 hours a week for four years.
And so, yeah, that's where.
I mean, if you look at some of the blog posts that I write, like, you'll notice if you read enough of them, they follow, like, a very, very similar pattern.
And it's just like.
It's a very, very, like, persuasive type pattern.
And.
Yeah, so that's.
That's kind of where it comes from.
Yeah, I had 13 national finals, and I won.
I can't even.
It sounds really arrogant, but I can't even remember how many state titles I won in Illinois.
But it was.
Yeah, it was definitely a fun ride.
And actually, what's funny is I've been.
I've joked that I'm basically trying to create my own debate team at Price intelligently, just because I loved that so much when I was on college.
College.
Cool.
Omer (55:46.420)
And finally, what is one of your most important passions outside of your work?
Patrick Campbell (55:52.740)
Passions outside of work?
What are you talking about?
Oh, I don't even know.
I can't.
I don't know.
I was just talking to my girlfriend about this.
Like, I need a hobby, I think.
Okay.
So I think kind of goes off my last answer.
I really like reading speeches, so I read and I critique for fun.
This sounds so nerdy now that it's coming out of my mouth.
This Might be the fun fact.
Actually, this might be a better fun fact.
So what I'll do is especially in down ticket races, meaning governorships or senate or state or some others, I'll get either a recording or a transcript of someone's speech, I'll critique it and then I'll send a critique to the campaign of whoever is actually critiqued and sometimes get some really interesting back and forth with some interesting folks.
But yeah, I really, I should start a blog for that because I've read a lot of like, I read like anthologies of speeches all the time and I think I referenced actually a speech earlier.
It was Teddy Roosevelt's 1899, you know, speech.
I still can't remember the name, but so I read a lot about that and I critique it.
And so that's kind of a passion hobby of mine.
Even though I, you know, it's not like, you know, it's not something like playing soccer or something like that.
I guess it's not something that's traditional, I suppose.
Omer (57:14.580)
See, this is why I love doing the lightning round.
In like a few minutes I get to learn.
I've learned more about you than I did talking for the first 30 minutes.
Patrick Campbell (57:25.380)
Yeah, I feel like you should start with the lightning round.
And I also like how like by the third or fourth lightning round question, the answer started flowing because I was like, at first I was like, oh, my book.
What book?
Like, I can't think of anything.
Yeah, but no, it's cool.
I like it.
Cool.
Omer (57:40.870)
Patrick, I really enjoyed this conversation.
So thank you for making the time to, to chat with me and sharing your experiences and, and insights about pricing strategy and then the story of price intelligently.
Now if you want to find out more about price intelligently, you can go to, to priceintelligently.com and if folks want to get in touch with you, Patrick, what's the best way for them to do that?
Patrick Campbell (58:09.250)
Yeah, best way is to just go right to patrickriceintelligently.com that's, you know, you can email me and it might take me a little bit while I triage my email inbox a little bit.
But I typically get, get back to everyone, so should be, should be fairly, fairly easy to get, get to me.
Omer (58:27.390)
Sweet.
Patrick, thanks again.
It's been a pleasure.
I wish you all the best.
Patrick Campbell (58:31.310)
Yeah, absolutely.
Thanks for the time.
Cheers.
