Unlocking scalable growth through smarter pricing.
Revenue Growth
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Sales Efficiency
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Market Entry
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The situation.
When BDNA began, its pricing structure and strategy were an
afterthought. After twelve years in business, BDNA made the realization that they were a content company, not a software company. This was only given attention as the company was ready to market with its initial product offering.
They saw this as a major barrier to monetizing their intellectual property and desired to get paid more fairly for the value they delivered to customers, struggling with how to capture this from the dynamic content they provided.
Based on gaps and inconsistencies in their home-grown monetization approach, buyers
eventually learned that waiting until the last minute in the fourth quarter to purchase
BDNA’s enterprise solutions would result in significantly better terms.
Discussions with customers clearly demonstrated that there was significant value being
delivered. But when it came to defending prices, customers were asking for—and receiving—enormous price concessions.
Internally, there was a lack of consensus about what to do about it, so they reached out
to us for help.
"Almost all of our deals now come in within a few points of calculated net price, which is SO much better than before... Just look at the revenue preservation! It’s remarkable."
-Walter White, BDNA President
The challenge.
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- BDNA wasn’t getting paid fair for the value of their content.
- Product pricing was perceived as too complicated by salespeople and customers.
- Discretionary discounting was out of control: salespeople had broad rights to ignore core pricing rules near end of quarter to make their numbers, obtaining enormous discretionary discount approvals.
- Their new perspective of themselves as a content company made it difficult to focus on addressing their other, equally important challenges.
The solution.
SPP’s three-stage, comprehensive monetization engagement was completed for BDNA. At the end of Stage 1: Discover, we identified additional challenges that were addressed as part of this engagement:
Customers seemed to appreciate the content BDNA’s solution delivered, but not as much as they valued the cleanup and transformation of their data, making the journey to monetizing content more challenging.
Because of the complexity of the packaging model, customers didn’t seem to fully understand what they had purchased.
Customers perceived different value when counting hardware vs software vs devices.
Customers believed they were paying for capacity and/or capabilities they didn’t necessarily need.
Value from ancillary services and products including professional services and data extractors was not being captured.
Perpetual licensing schemes were at odds with capturing full value from discretionary discounts, which were much higher and more uncontrolled than management realized.
“Land and expand” sales strategies often resulted in surprises for the client, which ultimately limited BDNA’s ability to expand sales.
Proposal preparation and review were tedious despite the use of configurators, calculators, etc., because of the services and products.
The success.
Software Pricing Partners’ engagement with BDNA delivered significant and positive results, including:
Cool Stat
XX%
growth in 3 years following SPP's engagement
They effectively bundle and charge for their content, professional services and data extractors on a recurring subscription basis (term) instead of one-time upfront basis (perpetual) which enables them to capture full value from all of their products and services.
They eliminated egregious discretionary discounts, better protecting net prices (i.e. "revenue preservation") and substantially increasing deal velocity.
We created a licensing metric completely unique to BDNA's offerings which linked more closely to the right value creation point as perceived by customers.
