Creating long-term value for your customer and being compensated appropriately for that value is the key reason to start a company. Learn actionable monetization tips from the former Head of Growth at Evernote & Invoice2Go and now Investor at Menlo Ventures. As someone who has built new products from scratch, and helped existing products scale from 10M to over 100M users, Naomi empathizes with entrepreneurs at every stage of the business and product lifecycle.

1. Matching Price to Value:
3 Lessons in Monetization
Naomi Pilosof Ionita
Partner, Menlo Ventures
August 7, 2019

2. Professional Background
naomi@menlovc.com
@npilosof
Started growth function at:
• Evernote: 10M to 100M users
• Invoice2go: Top-grossing Business app
Engineering and new product development
Partner at Menlo Ventures focused on SaaS & consumer
Advising on product-led growth/monetization
with companies + communities (Reforge)
Naomi Pilosof Ionita

3. Naomi Pilosof Ionita @npilosof #TractionConf
Focus on creating long-term value
for your customers...
…but also ensure that you’re being compensated
appropriately for that value.

4. Naomi Pilosof Ionita @npilosof #TractionConf
3.32%
6.71%
12.70%
0%
2%
4%
6%
8%
10%
12%
14%
Acquisition Retention Monetization
Source: Price Intelligently; n= data from 512 SaaS companies
Monetization is 4x More Efficient than Acquisition
Impact on Bottom Line
by Improving Each Lever by 1%

5. Naomi Pilosof Ionita @npilosof #TractionConf
How did you decide on your pricing ?

6. Naomi Pilosof Ionita @npilosof #TractionConf
“ Honestly, it was pretty arbitrary.
We just picked something. ”

7. Naomi Pilosof Ionita @npilosof #TractionConf
“ We made it artificially low;
we didn’t want price to get in the way
of people using it. ”

8. Naomi Pilosof Ionita @npilosof #TractionConf
“ We wanted to position ourselves as Premium.
One prospective customer told us:
‘ You’re the Apple of your category.
I need to save budget to afford you ’
— and that was fine by us! ”

9. Naomi Pilosof Ionita @npilosof #TractionConf
Know Who You’re Building For
Lesson 1 :
Segment Users by
Needs and
Willingness-to-Pay

10. Naomi Pilosof Ionita @npilosof #TractionConf
: Customer Segmentation
Lowest WTP
Value speed
Value extra space
Highest WTP
Uber Pool
Uber X
Uber XL / SUV
Uber Select /
Black
“ I need to get from A to B ”

11. Naomi Pilosof Ionita @npilosof #TractionConf

12. Naomi Pilosof Ionita @npilosof #TractionConf
Value does not automatically translate to Perceived Value

13. Naomi Pilosof Ionita @npilosof #TractionConf
Feature Shock

14. Naomi Pilosof Ionita @npilosof #TractionConf
Who are your customers ?
Why do they pay you ?
How much are they willing to pay you ?

15. Naomi Pilosof Ionita @npilosof #TractionConf
Establish a Pricing Process
Assign
an owner
● Product Growth
(Self-serve/SMB)
● Sales
(Mid-Market/Ent)
Talk to
customers
● Internal feedback
loops
● Survey methods:
- Conjoint Analysis
- Gabor-Granger
- van Westendorp
Be willing
to experiment
● Don’t be afraid
to raise prices
● Isolating by
geo can help
● This work is
never done

16. Naomi Pilosof Ionita @npilosof #TractionConf
More Effective Survey Questions
Distribute 100 points across the features below
Rate features “must have”, “nice to have”, or
“not necessary”
Which features would you include in an ideal
package?
What annual price would you consider to be:
- acceptable?
- expensive, but still willing to pay?
- prohibitively expensive?
Below is a list of
features – check off
the ones you want
[No conversation
about price]
Value
WTP

17. Naomi Pilosof Ionita @npilosof #TractionConf
Lesson 2 :
Align Pricing & Packaging
with Building Accretive Value

18. Naomi Pilosof Ionita @npilosof #TractionConf
: Rebalancing Pricing & Packaging
Increased upgrade rate by 108%
While increasing upgrade price by 33%
Without impacting customer sentiment

19. Naomi Pilosof Ionita @npilosof #TractionConf
• Increase prices / use a
smart natural escalator
• Rebalance sticks & carrots
• Upsell / cross-sell users to
higher-priced plans / additional products
How ?

20. Naomi Pilosof Ionita @npilosof #TractionConf
You’re Probably Underpriced :
“ It’s $20… I mean, $200 per month ”

21. Naomi Pilosof Ionita @npilosof #TractionConf
Upgrade Levers : Sticks & Carrots
New features
unlocked with
upgrade
Quota limit
forces upgrade

22. Naomi Pilosof Ionita @npilosof #TractionConf
Contextual upsells are effective –
user is in high-intent state
and no additional education required
Sticks are Your Value Metrics

23. Naomi Pilosof Ionita @npilosof #TractionConf
# Admin Seats
# Equity Grants Disincentivizes usage
# Shareholders Revenue scales with value
Cap Table Management
Revenue doesn’t scale with value
: Picking the Right Value Metric

24. Naomi Pilosof Ionita @npilosof #TractionConf
SMB
Mid-Market Enterprise Public
Formations
Financings
Liquidity: Tenders, Secondaries
HR & Payroll Integrations
Board Management: Resolutions, Docs
$ As customers grow, they derive more value from Carta $$$$
Support for International Employees
: Picking the Right Premium Features

25. Naomi Pilosof Ionita @npilosof #TractionConf
: Rapid Revenue Growth
100
90
80
70
60
50
40
30
20
10
1 2 3 4 5 6 7 8 9 10 11 12 13
$inARR(Millions)
Years
*Year 1 is from time Carta began selling recurring software. Source: Bessemer Venture Partners

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Lesson 3 :
Improve Monetization with Predictive Data

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Very High
High
Low
Very Low
Predictive Analytics – Customer Propensity to Renew
Input Variables Most Predictive
Propensity
Segments

28. Naomi Pilosof Ionita @npilosof #TractionConf
Targeted upgrades
for high propensity
Renewal experience for
very low propensity
: Personalized Experiences by Segment
• Reinforce value of
core features
• Build awareness of
premium features
• Offer targeted
promotions/discounts

29. Naomi Pilosof Ionita @npilosof #TractionConf
Causal Analytics
for Growth Teams
Analytics platform merging
Artificial Intelligence &
Experimentation to identify
what actually causes your
users to convert
: AI-Driven Growth

30. Naomi Pilosof Ionita @npilosof #TractionConf
Case Study
Growth team identified users
with highest propensity to
upgrade, and increased
conversion rates from 4% to 10%
via cross-channel targeting with
Facebook & Braze
: Upgrade Campaigns with Clearbrain

31. Naomi Pilosof Ionita @npilosof #TractionConf
SMB
Self-Service
Product Team:
- Drives self-serve
revenue
- Targets businesses
< 250 employees
: Data-Informed Hand-Offs
Sales Team:
- Upsell leads into
higher ACV
customers
Mid-Market /
Enterprise
Qualified
leads
based
on data

32. Naomi Pilosof Ionita @npilosof #TractionConf
Wrap-Up
2.
Align Pricing & Packaging with Building Accretive
Value
3.
Improve Monetization with Predictive Data
1.
Know Who You’re Building for —
Segment Users by Needs and Willingness-to-Pay

33. Thank you!
Naomi Pilosof Ionita
naomi@menlovc.com
@npilosof