The Secrets to Keeping Your Brand Design Fresh

By Sharon Lee 

Branding can significantly impact a business's success. A study by Lucidpress found that a consistent brand presentation across all platforms can increase revenue by up to 23%.

 

"Your brand is the single most important investment you can make in your business." — Steve Jobs

 

Achieving balance in branding is crucial because it ensures that your brand's message resonates with your target audience while maintaining brand consistency and clarity across all platforms.

 

When your brand strikes the right balance and consistency, it effectively communicates its values, identity, and offerings with a fresh approach without being boringly overwhelming or alienating your audience. This equilibrium helps builds interest, trust, loyalty, and a strong emotional connection with your buyers.

 

So, how do you define a balance so that you will not design yourself into a box? 

 

 In this blog post I will share nine steps to achieving and maintaining a balance. 

1.   Establish Brand Guidelines—define your brand's core values, mission, vision, and personality. Formalize this by creating guidelines for your visual elements (logo, colors, typography) and the tone of voice that captures these essentials. By developing this foundation you will achieve consistency while providing a framework for creativity. 

 

2.   Flexible Visual Identity—design a versatile logo and visual elements that can adapt to different contexts. For instance, consider variations of your logo within guideline standards or a theme that allows for different design options while remaining recognizable. 

 

3.   Embrace Modular Design—use a modular design system that allows for flexibility in layouts and compositions while adhering to brand guidelines. This approach will let you mix and match elements for various applications without losing brand identity.

 

4.   Focus on Storytelling—create narratives around your brand that can evolve over time. This enables you to introduce new ideas and concepts while maintaining a consistent brand message.

 

5.   Stay Informed About Trends—keep an eye on design trends and industry changes. This awareness can inspire fresh ideas and innovations that align with your brand's essence without straying from its identity. Continuous improvement is a must!

 

6.   Gather Feedback—seek feedback regularly from your target buyers and internal stakeholders. Understanding their perceptions can help you adjust your design approach while ensuring that it remains aligned with brand values. 

 

7.   Adapt to New Channels—adapt your brand's messaging and visuals as new platforms and technologies emerge. This way you can keep your core identity intact while preventing your brand from feeling stagnant.

 

8.   Encourage Internal Collaboration—foster collaboration among different teams (such as marketing, design, product development) to ensure a holistic approach to brand consistency. After all, diverse perspectives can lead to innovative ideas that still respect the brand’s core identity.

 

9.   Iterate and Evolve—allow your brand to evolve naturally over time. After all, consistency doesn't mean rigidity; it means staying true to your core values while being open to change and adaptation.

 

By following these steps, you can maintain brand consistency while still allowing room for creativity and innovation, ensuring your brand remains relevant and engaging without being confined to a narrow design box.

 

Achieving a balance in brand consistency while avoiding design constraints requires a strategic approach.

 

Thanks for reading.

 

And see my blog posts, What Types of Branding Are Best for Your Business and Starting Right With Good Design, if you are a relative newcomer to branding. 

 

Let us know what you think about this blog post by emailing me at shamikodesign@gmail.com.

9 Tips for Creating Ads that Work

By David Ronald

All businesses need promotion. 

After all, no matter how awesome your company’s product or service is, if you don’t advertise it, nobody will know about it.

Advertising is a little bit of a black art. Some ads are highly effective while others hurt more than they help. It can take a bit of trial and error to create an advertisement that really works. 

In this blog post I will share nine tips that will increase the odds of your ads being successful.

1. Determine what will make you stand out—identify and evangelize the key things that will make your prospects pay attention to your company’s product or service. Show your potential customers why your business should be their number one choice and why they shouldn’t even consider your competitors. If you do this effectively, there is a good chance they won’t.

2. Use a headline that grabs viewers’ attention—people are exposed to multiple ads each day and can’t possibly read each one. This is why you have to make sure that your ad actually grabs and keeps their attention. Some headlines are newsworthy, such as in the release of a new service or product. Others have a very strong benefit. Most are specific, as opposed to general, in their facts.

3. Focus on benefits—explaining the features of your products or services is important, but articulating the benefits for the buyer is what it’s all about. After all, people are more interested in what they get from your services than what you do.

4. Make people an offer they can’t refuse—buyers love a bargain, so offer them a good one increases the probability of a sale. Once you come up with your irresistible offer, make sure that you advertise it proudly. When people see that you have something great to offer them, they will have a difficult time resisting it.

5. Make your offer as risk-free as possible—people are nervous about spending their money. And if people fear that they’re going to lose their money and regret their purchase, they are unlikely to purchase your product. But, if you remove these doubts, people are given an incentive to give your product or service a try. So it’s a great idea to offer a money-back guarantee.

6. Use testimonials—people trust other consumers and want to know what they have to say about a company. You can’t make people look for online reviews about your business, but you can give them the same peace of mind by adding a testimonial from a current client who is pleased with what you have to offer. Seeing that other buyers just like them are happy with your product can encourage potential customers to give you a try.

7. Include a call to action—don’t just inform your prospects about what your company has to offer; encourage them to take action. Tell them directly to click on your ad, order your product, pay for your service, etc. For example, your call to action can encourage people to email you for more information, to fill out a form to find out more about your services, to join your weekly or monthly email newsletter or purchase your product.

8. Create a sense of urgency—you don’t want to just plant a seed with your ad, you want people to move forward. Consider, for example, making an irresistible time-limited offer. Or bring in an upcoming season or event when your product will come in handy to make people buy now.

9. Complete contact information—your ad should include a link to your website for more information as part of the contact information. If your offer include an offer to download collateral, consider making that item gated (ie, the viewer has to provide their contact information before accessing it). Include a QR code if your advertisement is in hardcopy format.

Every type of promotion helps a business succeed and advertising, when done well, will have a huge impact.

Thanks for reading.

Get in touch at david@alphabetworks.com if you;re ready to increase the revenues of your business with advertising.

A Brief Guide to Mastering Product Positioning

By David Ronald

Okay, so you’ve built an amazing product that has the potential to delight your customers and help them attain their business objectives.

A great product by itself, however, isn’t always enough—you need to communicate what makes your product different from every other product out there.

According to research by Gartner, 77% of B2B buyers state that their latest purchase was complex or difficult. This statistic emphasizes why clear and effective product positioning is crucial.  

When products are well-positioned, it helps simplify the decision-making process for buyers by clearly communicating the product's value, differentiators, and relevance to their specific business needs. This can lead to faster sales cycles and increased buyer confidence.

What is Product Positioning

Product positioning is the process of defining where your product fits in the market and why it's the best solution for your customers. It helps you manage customer perceptions and communicate how you want users to think and feel about your product.

Positioning highlights your product's value and sets the context for understanding why customers should care.

It’s best, therefore, if you put yourself in the shoes of your buyers and take a user-led approach to positioning your product. Doing so will create a solid image in the perception of your buyer.

Developing Your Positioning

Product positioning is an ongoing and evolving process that needs to adapt in response to changes in your industry and your customers' needs.

Here are five steps you can follow to develop the best positioning for your product.

1. Identify Your Buyers

You cannot sell your product to everyone, because not everyone perceives your product to solve their problems. 

The first step in determining your product positioning is to identify potential buyers. 

Begin by developing your ideal customer profile(s) - an ideal customer profile (ICP) is a short description of your perfect customer, based on characteristics such as industry, company size, and requirements, that align most closely with your product.

Next, determine your buyer personas. There may, for example, be an engineer who is excited by the technical attributes of your product; there may be a someone in finance who understands the cost benefits of you product; and there could be an executive who appreciates the strategic value of your product. 

2. Understand Your Buyers

Your customers decide to use your product over your competitors for a reason

If you can identify why that is and investigate what exactly makes them use and stick to your product, you can use that insight as the basis for positioning your product.

The why could be factors like pricing, a specific feature, customer service, associations with the product, or ease of use. The better you understand why customers use your product, the more customer-led your positioning can be to make your place in the market more prominent.

Use on-site surveys on high-traffic product pages. Ask questions such as these: 

• "Why do you use this product?"
• "How would you rate this product on a scale of 1–10?"
• "Which feature or product element do you use the most?"
• "How would you feel if you couldn't use this product anymore?"

A great tool to use in determining your positioning is perceptual maps. These are intended to uncover how your buyers perceive your product. Here's a simple example:

In this example, Brand A is perceived to be higher price than alternatives but provides better quality. Brand B is perceived to be lower price than alternatives but provides lower quality.

You can use perceptual maps with different labels on the vertical and horizontal axes to uncover your strongest attributes in the eyes of your buyers.

3. Analyze Your Competition

In parallel with developing an understanding of your target buyers, you want to position your product as a better solution than your competitors. But you can't do that unless you know the competitor's product and how they're positioning it.

Conduct market research to analyze your competitors' new and old products to understand how they're helping customers, which features they have, and what benefits they offer.

Identify whether you have any distinct features that can set you apart. If not, iterate on your product and focus on being more customer-centric than your competitors, so you have something that sets you apart in the market.

4. Identify Your Value

Your value proposition should be compelling. It's insufficient, for example, to provide a 10% cost savings than the competition, or a 2x improvement in productivity than alterative approaches.

Your buyers need a value proposition that's substantial and motivates them to switch to a new way of doings. Otherwise, why should they go through the hassle of changing? In order to be compelling, your value proposition should offer a 10x improvement, or better.

Ideally, your value proposition has been built into the product from day one. If not, find a unique product feature that sets you apart from your competitors. It's okay to be niche, at least while you are gaining traction in the marketplace.  

By developing a value proposition that is compelling and captures the attention of your buyers, you are going to make the lives of your sales team vastly easier, and they will love you for it!

5. Establish Your Positioning

A positioning statement is short description that says what your product is, who it’s for, and why exactly customers should care about it. 

Use this formula: (Product name) is a (product category) that helps (target customers) achieve (differentiating benefit your product offers) to avoid or solve (users' needs).

Here's a B2C example: 

"For athletes in need of high-quality, fashionable athletic wear, Nike offers customers top-performing sports apparel and shoes made of the highest quality materials. Its products are the most advanced in the athletic apparel industry because of Nike's commitment to innovation and investment in the latest technologies."

Here's a B2B example: 

"Slack is the collaboration hub that brings the right people, information, and tools together to get work done. From Fortune 100 companies to corner markets, millions of people around the world use Slack to connect their teams, unify their systems, and drive their business forward."

One of my favorite quotes is from Donald Knuth, a computer scientist & mathematician, who stated that, "Premature optimization is the root of all evil”. In other words, don't rush to conclude that your have nailed your product positioning. 

Test your positioning with your employees (especially your sales teams), your buyers, and anyone whose opinion your value (such as investors and industry analysts). 

Keep your Positioning Up to Date

Your product will evolve as you grow, and customer behavior and buying trends will change with time. 

So it's crucial to iterate on your product positioning to ensure it stays relevant and differentiates your product in the market.

Regularly ask yourself these questions to ensure you're leading with the right product positioning:

• Have market trends or customer needs changed?
• Are there any new products in the market similar to yours? Are they doing something differently?
• Have you introduced any new product features or new products altogether which offer a new benefit to your customers?

Is there a better way to communicate your product positioning?

Are you getting good results with your current strategy? Compare your past and present metrics like sales, customer retention, conversion rate, referrals, social media engagement, and signups to get data-driven insights.

The answers to these questions will tell you if you need to revisit your product positioning strategy and make it more relevant for customers.

Wrap Up

By conducting thorough buyer and competitive research, identifying your compelling value proposition, and crafting a clear positioning statement, you build a strong foundation for downstream deliverables. Your messaging framework, for example, will be informed by your product positioning (watch for an upcoming blog post on that topic). 

The idea is to tell the customers what they need to know about your product so that they'll believe in it and purchase it.

Thanks for reading all the way to end.

Email me at david@alphabetworks.com and let me know what you think.

Secrets that Website Designers Don't Tell You

By Sharon Lee

You want a website that captures interest, holds it, and brings you sales.

It’s easy to say, but not necessarily simple to do. Creating a website that becomes a major revenue driver can be fun. Or it can be a nightmare.

Have you ever had a run-in with a website developer who promised you a brilliant design but all you got was a big mess? No, you’re not an expert, but you know what’s good and what’s not. You also know when you’re being taken advantage of. All you wanted was a website that would help you succeed, and what you got instead wasn’t worth the pixels it was painted on.

In this post I will share some secrets that can help ensure you end up with the best website.

1. You don't need to spend a fortune

People say you get what you pay for, and sometimes, that’s true. But it’s not true that you need to spend your life savings on a good website. There are too many designers out there preying on your ignorance, charging exorbitant rates for their own profit. They blind you with jargon and fancy coding terms. Don’t put up with it.

Decide your budget and find graphic designers who can work within it. Look for designers that fit the style of site you’d like for your business. Visit other sites you like and see who designed them. Ask for quotes, take your time and shop around.

It’ll save you thousands of dollars.

2. Design is about psychology

A graphic designer needs to know color psychology and the associations people make with specific shades and tones. She needs to know what imagery will appeal to people, the type of people it’ll appeal to, and why it appeals to them. She needs to know what’s going on in people’s minds when they land on sites and as they navigate through yours.

Are smooth curves better than concentric circles? Is IBM blue the best color or is deep red a better choice? What will draw people to the right or the left? What emotional state should the site create? Should the design be modern and simple or colourful and bold or soft and comforting? Where do a person’s eyes travel, and what will make them stop?

Good designers know all this and much more. They understand that their goal is to influence a visitor’s psychological state of mind and perception of your business. The more designers know about how people behave, what makes them take action and ways they react to different elements, the better they can implement persuasive strategies into your site.

3. You don’t need to be totally unique.

It’s true that you need to stand out these days and look different from all the rest. The problem is that some designers take it a little too far, and they design you a site that’s so unique it breaks all the rules – and not in a good way. Your stunning site ends up being a confusing experience for visitors.

Designers need to create sites that follow web conventions and usability rules, because these are the ultimate guides to navigating your site quickly and easily. If you break them, you’ll confuse your visitors.

Shun conventions and you’ll create a visitor experience that’s similar to walking into an alien world.

4. Branding is a special skill, and not all designers do it well.

Most designers aren’t skilled in developing brand identities. They’re good at developing graphic design that reflects your brand identity, but if you haven’t supplied them with that crucial information, they’re just assuming.

They’re assuming your target market, and what appeals to those ideal customers. They’re assuming the values of your business and its marketing message. They’re assuming its personality and the type of experience your customers will have when they work with you or buy from you. You know what they say about assuming, right?

It’s far better to work with a specialist to build your brand identity before you hire your web developer. Otherwise you’ll just attract the wrong kind of people, and the entire website will be a waste of money.

5. Maintaining a website isn’t expensive.

Since graphic design and website development is usually a one-time expense, unethical providers try to loop you in as a customer they can bill every month for recurring charges.

When someone offers you an upsell maintenance package, ask what they’ll do for that money. Then go to Google and find out just how easy it is to do what they’ve offered you.

Not interested in maintaining your site? By all means, hire someone to do it for you. Just be sure you’re not being overcharged for quick and easy jobs.

Designing a website involves many factors and, when done right, produces results. There are pitfalls, however, and I’m hoping this post will help you avoid them. 

Thanks for reading.

Feel free to get in touch at shamikodesign@gmail.com if you would like assistance designing your next website.

 

12 Marketing Tools that will Help Grow your Business

By David Ronald

Building a company is an exciting venture, but creating and sustaining demand for what you are selling can be challenging. This is where marketing comes in.

There are many marketing options available to help a startup grow revenues. In this blog post I’m going to review the key ones:

• Advertising—the goal of advertising is to attract new customers. After all, no matter how awesome your company’s product or service is, if you don’t advertise, nobody will know about it. Although there are many forms of online advertising, some of the most effective methods are search engine ads, banner ads and social media ads. Click here to read more about these three different types of advertising: http://bit.ly/1R8P1PM.

• Branding—a powerful brand increases the probability of your company’s success. A strong identity builds awareness, evangelizes your company’s story and, ultimately, increases return on your investment. A brand is much more than a name or a logo—it’s the sum of all the creative touch points of your company. And a strong identity gives you an edge over your competitors. Here’s a blog post describing how we developed the Alphabet brand: http://bit.ly/1SmXtf6. 

• Content marketing—content marketing alters the way you sell by shifting the focus from hyping your products to adding value to prospects’ decision making. Content marketing is about creating relevant, informative and unbiased content that attracts buyers and converts them to loyal customers. Click here for our white paper on content marketing: http://bit.ly/1GHDSxB.

• Go-to-market strategy—good marketing seldom occurs by chance. Developing a marketing plan is priceless because it sharpens your awareness of what makes your business unique and how to evangelize it effectively. A well-crafted marketing plan explains the benefits of your product, evangelizes how you are better than your competitors, describes the channels you will use to reach your target audience and how you intend to price your product. Click here for an article describing why marketing planning is priceless: http://bit.ly/1Vq8xI0.

• Messaging—a comprehensive and carefully-crafted marketing messaging architecture should underpin all your evangelism, from your sales collateral to your media interactions. This architecture informs how you talk about who you are and why you exist; it communicates key points you consistently make when you reach out to your target audiences. See this article for an explanation as to why vendor personas are an important consideration in messaging: http://bit.ly/1IEtA7X.

• Public relations—good PR is about building and sustaining a groundswell of brand support, incrementally changing buyer behaviors via a steady stream of relevant and candid communication to both media and consumers. A well-constructed PR campaign ensures your company is seen in the right places and remembered for the right reasons—and, perhaps most importantly, at the right time. Click here to learn what startups can accomplish with good PR: http://bit.ly/1NgJJ5g.

• SEO—search engine optimization (SEO) can have a dramatic effect on the success of any business regardless of its size. And, while some people may want you to think that it takes years of dedicated study to understand SEO, the truth is that you can learn the fundamentals in hours. Moreover, SEO is steadily becoming more intuitive and less technical. Check out this article for seven tips on how your company can leverage SEO and increase sales: http://bit.ly/1lW3GC7.

• Sales enablement—your success maps directly to the proficiency of your company’s sales team. How does sales enablement help? The goal of sales enablement is to ensure that every one of your sales reps has the training, tools and metrics needed to optimize each interaction with buyers. Click on this link for our white paper on sales enablement: http://bit.ly/1Lbl1z7.

• Social media marketing—why should you utilize social media marketing? When used correctly, social media can be an effective tool for growing your business—it can send traffic to your website and convert visitors into leads and customers. The benefit of using social media to market your business is that no matter how specific your business is there is an audience for you on social media. Here’s a description of how social media can help any company grow revenues: http://bit.ly/1lfDliw.

• Video marketing—video is one of the most effective forms of marketing. It is a powerful way to connect with your audience on an emotional level and increase consumer engagement. It can also give people a reason to talk about you—video is shared more than any other source of content. And, once in a while, a video goes viral. What’s more, research shows that over half of buyers feel more confident about buying a product or service after watching a video. Read this blog post to learn more: http://bit.ly/1VqdBMv.

• Website design—a website is one of the most important investments you can make. You want a website that captures interest, holds it and brings you sales. If your site looks professional, your potential clients will think you’re a professional who has enough clients and enough income to have a site built for you. If potential clients visit your site and it looks half-assed and home-built that’s how they’ll perceive you. Click here for five secrets that website designers don’t tell you: http://bit.ly/1ZCfKXP.

• Word-of-mouth marketing— Word-of-mouth marketing helps create and sustain demand for what you are selling by nurturing a passionate community that speaks positively about you. At a minimum, this community should consist of your customers, who can serve as references, participate in webinars and speak at conferences. It should also include media and analysts who provide favorable coverage of your company and product. And can also include influencers such as industry luminaries and bloggers. Click here for our white paper on WOM marketing: http://bit.ly/1jAM2Ct.

Thanks for reading.

I hope you found this review of marketing tools useful. 

Did I leave something off this list? If so, email me at david@alphabetworks.com telling me what it was.

7 Types of Video that will Improve your social media marketing

By Scott Mason

Video is my favorite way of learning about a topic. Yes, I like to read, but nothing has the emotional impact of a video.

Telling stories with video increases engagement and gives people a reason to talk about you—approximately 72% of marketers plan to use more video in their social channels, according to the 2023 Social Media Marketing Industry Report. What types of videos will get the attention of your audience? Creating videos that tell stories is a powerful way to connect with your audience on an emotional level and increase engagement with your content.

In this post I will describe how best to combine video, storytelling and social media.

1. Share Your Customers' Stories

We’re big believers in customer advocacy here at Alphabet—it’s a great way to evangelize how your product is helping to enrich your buyers’ personal or work lives.

On Airbnb‘s Facebook page, the company posts video stories about places around the world, as told by Airbnb hosts. This is a great way to produce engaging and interesting content, and create an emotional connection between your prospects and your business.

2. Tell Personal Stories

Gary Vaynerchuk is a great example of how to do this successfully—he is known for stories and video from his Wine Library TV days and he’s constantly innovating. He regularly posts videos on his YouTube channel that include personal stories as a way to connect with potential customers.

3. Interview Interesting People

An interview or video podcast is a great way to draw out stories from industry thought leaders, customers or partners. Video interviews don’t require a big budget. Just make sure you have good questions and an engaging guest.

Someone who does this well is Michael Hyatt—he posts portions of his video podcast interviews on his Facebook page as teasers.

4. Teach Viewers How To Do Something

The Home Depot does a great job of telling project-related stories from the customer’s point of view. In this YouTube video the company shows viewers how to install a tile backsplash.

Seeing people accomplishing their goals will inspire many of your viewers. Your videos can teach them how to do a project and highlight the tools they’ll need to gather to do the job.

5. Shoot A Documentary-Style Video 

Another way to tell stories with video is to shoot in a documentary style. Corning, for example, created a documentary-style video that explored applications for the company’s glass in a wide range of innovative products. It has been viewed by over 27 million people on YouTube so far.

6. Create Animated Stories

Another option for social videos is to develop an animated story, similar to what Chipotle has been doing with its video series Back to the Start on its YouTube channel.

You could hire a video production company that specializes in animation, but there are also a number of tools you can use to create animated videos such as GoAnimate, Powtoon and MakeWebVideo.

7. Take Viewers “Behind the Scenes”

People love to see “how the sausage is made”.

Constant Contact often provides a look at the people behind the company. In the following example, they posted a simple video on Facebook of their Day of Service Who doesn’t want to know more about a company whose employees have fun together—and one that contributes to charity? 

Okay, enough from me... 

Now it’s your time to get out there and be creative with video in ways that help your business grow revenues.

The Benefits of Pricing Your Product for Value

By David Ronald

Are concerns about pricing keeping you awake at night?

If so, it’s understandable—price your product too low and you leave money on the table; price it too high and you can say goodbye to sales that could have made your year.

SaaS companies have relied on subscription-based pricing for more than a decade. Subscriptions are a popular way to sell SaaS solutions because transactions are relatively uncomplicated. Customers can budget for the purchase, and SaaS providers can forecast revenue with a high degree of precision.

However, today’s customers are tired of “shelfware”—they don’t want to waste money on seats that go unused or pay upfront for solutions that may suffer from poor adoption. Usage is variable by nature, challenging to predict, and represents an unknown value-to-cost ratio.

Customers prefer to pay for exactly what they use.

A great product married with an easy-to-understand consumption-based pricing model can pack a powerful one-two punch for your business.

Benefits of Usage-Based Pricing

Companies that use consumption-based pricing are experiencing 38% faster revenue growth over their subscription-based peers based on research from OpenView.

Usage-based pricing not only provides business benefits, but it also helps improve your customers’ experiences: 

• It better correlates product usage with pricing and eliminates the risk of “black box” pricing associated with other approaches.It shifts cost control to your customers, providing them with maximum flexibility.
• It provides a low entry price point and allows customers to experience the full product regardless of company size.
• It improves customer retention since it does not require customer to cancel their plans during periods of lower usage.

Consumption-based pricing compels SaaS providers to better understand customers’ behavior and usage patterns. Through metering, you benefit from a continuous flow of data that illuminates each customer’s behavior in real time.

Transitioning to Usage-Based Pricing

Although there is a huge potential upside when you move to consumption-based pricing it doesn’t mean the shift will be straightforward.

Pricing equates to two things for customers: 

• Buyers must be confident that your pricing aligns with the perceived value they expect you to deliver.
• Buyers should believe that the value you will deliver is better than the status quo and what your competitors are delivering.

As you prepare to implement a consumption-based pricing model, focus on these five areas to minimize stress and help ensure success: 

• Pick a value metric that communicates your solutions’ benefits for customers (more on this below).
• Transform your sales process and compensation structure by aligning your sales team’s comp plan to the way customers derive value from your solution.
• Rethink your revenue playbooks to account for the variable nature of consumption and the challenges associated with forecasting revenue.
• Assist your customers in predicting and optimizing spend through consumption transparency, picking the right payment structure, and manage overage scenarios.
• Leverage data by unifying it in a central repository so you can deliver in a holistic view that provides insights into consumption and your financials on a daily basis.

Let's look now at the first item on the list above.

Picking a Value Metric

One of the biggest challenges is determining how to price your product. A well-priced solution benefits both SaaS providers and customers. It transforms providers into advocates for value, and value is about more than price—it’s about the success of customers. 

The purpose of a value metric is to communicate your product’s value to customers. It demonstrates an understanding as to why customers pay you for your service. Here are three factors to keep in mind when choosing your value metric: 

• It should be easy for buyers to understand immediately—your value metrics should not be complicated or incomprehensible.
• It should align with your solution’s perceived value.
• It should scale and grow in correlation with your buyer’s use.

What value metric is best for your business?

You can begin by recognizing the challenges and use cases that your buyers are trying to solve. Think about how your solution functions in order to solve a problem, and then consider the outcomes your customers track. Here are some examples:
 

Type of Organization	Value Metric
Internet marketing platform	Number of marketing contacts
Monitoring and analytics tools	Amount of data ingested
Authentication services	Number of external active users
Communication platform	Number of SMS messages
Cloud computing service provider	Amount of data stored
Security network	Pricing per feature
Task automation service	Number of tasks

It is important to ensure that it aligns with your delivery costs and will scale and grow with your customers whatever value metric you select—and the only way to uncover this ideal provider-and-customer alignment is through testing. 

This means that you should put your value metric out in the wild and see how it performs with real customers.   

Keep in mind that you’ll need to be patient—a data-driven approach requires implementing, testing, and iterating different ideas. 

It takes time and honing to ensure your value metric aligns with your underlying technology and resonates with your customers.

 

The Possibilities are Priceless

No one will tell you that adopting or shifting to a consumption-based pricing model is easy. However, it’s the right move if it aligns with your company’s overall product strategy and delivers stronger value to customers.

Startups may find it less complicated to adopt a consumption model because everything is greenfield. A try-before-you-buy approach may make it easier to attract customers, but don’t forget that you will chase revenue for a period of time until usage starts to grow consistently. 

Expectations must be set for a longer ramp-up time, and you must have enough funding and investor buy-in to support this strategy.

For mature companies, the process requires plans for handling current accounts and bookings and understanding what a hybrid model looks like. The benefits are that you have time to hone your consumption model to suit your business and can transition sales and finance teams to this new way of operating over time.

Remember that everything starts and ends with data. All data must be accessible from a centralized location and shared securely without friction or integration headaches. Today, that means you must build solutions on a cloud data platform if you want to support growth and enable pricing models that protect margins and drive new revenue.

The end result is delivering more value to your current customers, attracting new customers, and opening up new revenue opportunities—all of which are truly worth the effort.

Thanks for reading.

Let us know what you think of this blog post by emailing me at david@alphabetworks.com. Let me know if I omitted anything.

And keep an eye open for future blog posts on pricing for your business.

Although I'd like to take full credit for all the ideas presented in this blog post, it's the culmination of ideas from a variety of people and sources—the most significant of these is a paper by the smart people at Snowflake called “Consumption-Based Pricing Playbook", 2022 – it’s a terrific white paper and well worth a read!