Pricing Matters

A few years ago, I was asked to consult on a business model transformation project. The company was 20 years old, geriatric in "software years", and had relied on a piece of patented technology with perpetual license contracts for too long. The patent was expiring, competitors were circling, and their revenue was so spikey that it was making lenders nervous.

The company needed the most advanced pricing project I do: a business model transformation. Not only were they going to shift to a subscription, but they also needed to change their price metric. Both are open heart surgery in pricing terms.

Luckily, I've seen 5-alarm pricing crises before. I was part of the team that executed the Evernote turnaround in 2016. I have done true Hail Mary price changes when companies are hemorrhaging cash. I've certainly created my fair share of "shareholder value" in my day.

What I had NEVER seen, was how a business model shift can have a positive impact on the world.

I remember flying back and forth to the company's headquarters every week, thinking that this was the most business traveling I had done in my life. If I kept this up, I'd have super high airline status by March of 2020!

Of course, you know how that story goes...

By February we had completed our analysis and recommendation; the team was already selling the new usage-based subscription. When COVID hit, usage of the company's product went through the roof. This unassuming piece of technology was a core piece of infrastructure in both the travel and healthcare industries - in fact, the company was one of the only providers who could handle such a high level of traffic. External demand for the product skyrocketed, as did internal usage. Because the company had shifted to a subscription, new customers could buy the product without shelling out hundreds of thousands of dollars for a perpetual license. And because the price metric changed to "usage", the company could plow the incoming revenue into product enhancements.

Within a year, the company's footprint had grown enormously. What used to be a sleepy company that relied on old patents and gave lenders high blood pressure was now a behemoth in the space, with new products and innovations every day. Had we not changed the business model when we did, fewer customers would have had access to their software and the company would not have had the capital to improve their product. Both were crucial in bringing this product to as many people as possible during the peak of the COVID pandemic.

I don't usually say this, but in this case, better pricing saved lives.

Why Crescendo?

I started Crescendo because medium-sized software companies don't have access to good pricing resources. Their options are limited to 1) gold standard consulting firms with gold-level pricing, or 2) books. With lenders breathing down their necks, the company I mentioned was never going to spend 5% of their revenue on world-class consultants and didn't have time to read Pricing 101 .

They needed Crescendo.

Crescendo is a pricing consulting firm, with a few key differences that matter:

· Only experts. We don't farm your work out to analysts. You know who you're working with from day 1.

· Only the tools you need. We bring exactly level of analysis you need for a company at your stage. Smaller companies often have less data and fewer customers - that's ok, we've seen that before and know how to adjust.

· Only software. Only private capital. Private equity and venture capital have different needs. We take that into account when working with you.

· Only you. We don't take many clients at a time. You're a priority and we're part of a team.

Pricing is crucial to growing software companies, whether we're updating legacy business models or setting prices for the newest generation of AI products. Without good pricing, companies fail to live up to their potential, disappointing customers and investors.

We're here to help guide your journey and demystify the complex world of pricing.