From Offer Design to Pricing: Building Strong Go-to-Market Models
What makes a successful commercial strategy for tech companies? In this practical webinar, Simon Hess, Director at Simon-Kucher, breaks down the decisions that matter most: structuring offers, choosing revenue models and setting prices with confidence. Drawing on experience with software companies from scale-ups to global enterprises (including three Australian-New Zealand unicorns like Xero), Simon shares proven frameworks that typically deliver 15-30% incremental revenue growth.
Key themes:
1. The Goldilocks Problem: Too Complex vs Too Simple
The biggest hurdle in selling software is to offer design that's either too complex (established companies with 800 SKUs selling only a handful) or too simple (younger SaaS companies with one-size-fits-all packages). The solution: customer segmentation. Simon-Kucher's 2020 study revealed companies with usage or needs-based segmentation achieve 47% annual revenue growth versus just 16% for those with basic segmentation.
2. The Leader-Filler-Killer Framework
Evaluate features on expected adoption and perceived value. Leaders are high-value must-haves (the Big Mac), but don't bundle all leaders together. Fillers are nice-to-haves that round out bundles (fries and drink), but too many create a feeling of paying for unnecessary features. Add-ons (low adoption, high value) should be sold separately to maximise willingness to pay. Critical: evaluate these for each customer segment, not your overall base.
3. Package Strategy by Customer Type
Long-tail and SMBs get predetermined packages via self-serve or simplified sales. Enterprise customers need modular libraries with volume discounts and selective negotiations. Key accounts warrant customised offerings, but reserve this high-effort approach only for top revenue customers.
4. Behavioral Science Effects
The compromise effect shows adding a $40 wine bottle shifts majority selection from $20 to $25 middle option. Default options are powerful: pre-selecting ‘premium’ drives 55% to choose it versus 45% when ‘basic’ is pre-selected. The decoy effect introduces inferior alternatives to make bundles attractive. The power of sorting matters: placing premium packages first increases selection by 4 percentage points, and putting price at the bottom focuses customers on value first.
5. Price Models Aligned with Goals
Models range from fixed (retention-focused) to variable (acquisition-focused). Options include flat rates, tiered flat rates, base plus pay-as-you-go (balancing commitment with flexibility), and fully variable with linear or degressive pricing (built-in economies of scale). Choose based on whether you're acquiring customers with low barriers or retaining with predictable commitments.
6. Price Metrics and Value Alignment
Move beyond user-based pricing (lowest value alignment) toward usage-based (transactions, documents), company-based (revenue handled, headcount), or success-based metrics (increased revenue, reduced costs).
7. Value-Based Pricing as North Star
While cost-based and competition-based pricing matter, value-based pricing is the golden trail. Combine research methods: direct approaches and indirect approaches. Price differentiation should follow meaningful drivers like industry verticals, not random patterns.
8. The AMR Trade-Off Triangle
Start with strategic goals: Acquire, Monetise, Retain. For packaging: acquiring needs entry-level packages; monetising needs high-value packages. For price model: acquiring needs low commitments; retaining needs higher commitments. For price level: retaining means holding prices; monetizing means increasing prices.
Key takeaways:
Segment first, package second: needs-based segmentation drives 3x better revenue growth; tailor offerings to different customer needs
Apply leader-filler-killer framework: evaluate features on adoption and value for each segment; sell high-value/low-adoption features as add-ons
Match strategy to customer type: predetermined packages for SMBs, modular for enterprise, customised only for key accounts
Leverage behavioral science: use compromise effect (3+ packages), strategic defaults, decoy products and premium-first sorting
Align metrics with value: move beyond user-based toward usage, company, or success-based pricing that reflects business outcomes
Combine research methods: use both direct and indirect approaches for pricing confidence
Start with AMR triangle: identify whether you're trying to acquire, monetise, or retain, then work backward through packaging, model and pricing decisions
Watch the full discussion for detailed examples, step-by-step research methodologies, and frameworks for translating commercial strategy into measurable revenue growth.