Monetizing SaaS: Episode 40 with Claire Wang, Pricing & Communication Expert

Claire, thank you so much for being on the podcast. Um, I've gotten to know you very recently through your writing and your work on LinkedIn, which is always so interesting and so original. You've, you've had this— you've had— I mean, it really is, and I'm, I'm, I'm really grateful that you've joined this conversation. And you've had a very interesting career. I mean, it's been very dynamic. You've been all over the world. You've led pricing across different industries. You've taught pricing. You've worked for companies like General Assembly, KPMG, HSBC. I mean, it's a really robust career. Can you describe the journey and how you got to now?

The journey. Okay. I suppose my entire career is more or less built on pricing, but I would probably say like the early part, I was sort of just accidentally stumbled upon the profession of pricing because my background is in actuarial. Uh, so, you know, there's really just two paths for an actuary. You either do pricing or you do valuation. So on my first day, my boss was like, all right, Claire, you are our pricing girl. So that's where I am. But I, I appreciated this sort of like, you know, I suppose my boss probably had a hunch that I would be good for pricing. Uh, because I felt like my early days as, as a pricing actuary working for the insurance companies has really built up a strong technical foundation. And as you know, like pricing, we do a lot of financial modeling and all that. So that skill set has definitely been quite important for me to carry on for the, you know, to take for the rest of my career. But the really interesting, I suppose I wouldn't call that a switch, but the moment that really opened up my whole world about pricing and how it could be done slightly differently to the traditional sense of actuarial world is during my time with Telstra. Which was the biggest telco in Australia. I had the opportunity to be involved with, um, almost like a startup project. The company at that time wanted to set up a new telco in the Philippines, so I was sent on the ground to do like the pricing work. And it's like running a startup using company's money, right? Because we have unlimited funding— well, not unlimited, but we had a lot of funding. But you got to test a lot of things, you know. So I was working with the network engineers, the sales team, the product people, or basically everyone. And through that project, I really started to have a sense about what it feels like to work for a startup where you got your hands on so many things. And that definitely triggered, I suppose, that triggered me to work for startup, but also to see pricing from very different perspective. So I started seeing pricing from the perspective of salesperson. A product person, a finance person. So yeah, and that really helped me a lot, I suppose, for the rest of my career.

It's a great story, but I mean, I think one of the things that's so remarkable about your career journey, at least to me, is there's this very— obviously this shift from actuary work, then the real work with Telstra, but then you started teaching. You took everything that you'd learned as well as, you know, kind of the skills that you picked up as a teacher and took that to HSBC, if I've got my timeline correct. And so a lot of expert experience in banking. And now you are kind of moving off into kind of your own world and your own work of helping people with pricing and packaging. And so there's really sort of this mesh there of learning and teaching and learning and teaching. That seems to be a theme. Do you feel like that's right?

Yeah, I think that's a very good summary. I mean, I guess I've always enjoyed teaching and I see teaching as a way to help myself to learn. So, you know, I first had this sense of teaching when I started. So actually my background is in medical sciences. My undergrad was in medical sciences, but I did a postgraduate study in actuarial and I remember economics being one of the first subjects, like compulsory subjects you have to do. So I was in my first lecture and I immediately fell in love with economics. I was like, oh my God, this is so fascinating. And as we progressed through the lecture, I thought, you know, to sort of better enhance my knowledge, maybe I should start teaching the subject. So I asked the lecturer whether it would be okay for him to let me lead, like, you know, a couple of tutorial classes for the next semester. And surprisingly, he said yes. So I started teaching economics as a tutor, even though I've just completed one semester of economics. And that's where I realized, you know, the best way to really learn and enhance your knowledge is through teaching. And, you know, even with like teaching at General Assembly, it's exactly the same story. You know, I felt like I had a solid understanding of how pricing works, but it's through that teaching experiences, like the students sometimes ask me questions I've never thought about before. And I just kind of like continue with this, you know, when I wanted to— yeah, this, there's, it's funny you ask this because I just had a crazy story. I can code, like, because my early part of my career, I did a lot of coding, but we use a lot of SQL and SAS. But when I started working in Telstra, I realized Python became like, you know, the cool coding language, but I didn't know how to code in Python. So I thought, you know what, the best way to learn this is I'm just gonna teach a class in Python. So I told General Assembly, I'm gonna run a course for them to teach people how to code in Python, even though I had no idea how to do it. But I set this timeline for myself. I'm like, okay, I'm going to learn this in 1 month so I can teach students how to code. And I managed and I did a course and students seem to love it. So yeah, I shouldn't be sharing this story. I feel like people are going to start to think I'm full of shit. But trust me, the best way to enhance your own learning is through teaching other people.

I think it's so true and it is such a powerful way to learn. I don't think many people approach learning that way. I think it's rare and I think it's impressive. Do you remember one of those moments from General Assembly when you were teaching but you became the student?

At General Assembly?

Yeah. When you were teaching pricing, do you remember a moment where you became the student? When one of your students asked you a question, you didn't know the answer, you learned something from it?

Not immediately on top of my head, but, you know, as what I normally do, if students ask a question, then You know, if they ask a question I didn't know how to handle on the spot, I always would just refer back to the first principle. So rather than giving them an answer straight away, I would just be guiding through how I might approach that problem. And sometimes through that framework, we will come up with a solution on the spot. So yeah, that's kind of, I don't have a story here, but I think that's how I normally approached it.

Is there, are there any stories from, I wanna get into what you're building now, but before we go there, are there any stories from some of the prior companies that are particularly resonant for what they taught you about pricing and packaging?

Pricing and not exactly, but I felt like I have a slightly different perspective on pricing and packaging since I started running my own gig. And that realization came from most people don't approach pricing from that kind of packaging perspective. Because for me, right, I— my default is I will always look at customers, and then immediately I started segmenting my customer, and I'm trying to see, you know, whether there are some needs that are so different and I can put them into different packaging. But when I started to talk to people about their pricing problem, I realized that that will always go, okay, for simplicity, we're just gonna have one product. And sometimes it's just like a huge miss. Like, yeah, it's a huge miss because you could be easily designing 2 or 3 different products that sells the same product, but because the underlying needs are slightly different, you can have, you know, better monetization opportunity.

Tell us what you're building now.

It's, well, as I've been sharing with you before we started this podcast, I feel like I'm still on the journey. So initially my idea was quite simple. I'm just gonna be like a freelance pricing consultant because pricing has been what I've been doing for the past like 20 years. But as I started on this journey and as I started talking to more people, I realized that most people just don't know what pricing really is. And I guess, you know, we as pricing professionals are to be blamed because we don't really advertise ourselves. We don't really build our personal branding and as a result, No one knows what we do. And I don't know why, why are you laughing? Is that you agree or?

I agree. I mean, I've sometimes at our company, we've joked like there's this pricing priesthood, like, you know, there's the priesthood and only a small few have access to the information and everybody else doesn't really know or doesn't have access to it easily. And one of the things that we hope to do is break down that priesthood a little bit, but make these tools widely accessible.

Yeah, exactly. And that's kind of, you know, what gives me the idea what I'm— I've been spending more of my time doing now is on communication because I feel like, you know, we really need to put ourselves out there to tell the world about what pricing really is and to share more about what we do so that people have a better understanding of what pricing really is, uh, because there's just a huge unawareness out there. You know, like the LinkedIn post I put today was from the conversation. Well, actually a friend shared this with me. We're in the same private group and someone was saying that, you know, like I have some problem with my product. I want to raise price, but I don't really know how to do that without losing customers. So this other guy suggested that he should talk to me. Because, uh, you know, I work in pricing. So this guy was like, no, no, but we don't have a pricing problem. My, my problem is more about like losing customers and raising prices. So I was like, okay, if that is not a pricing problem, then what is the pricing problem? But you, you are laughing now, but I see this so often, like, you know, and maybe because I'm so in my own bubble, right? I see most problems in business as pricing problems. But most people don't think like me. And so there's definitely a bit of gap that we need to bridge.

Okay, well, that gets straight to one of the questions I did want to ask you, and I'm using this word purposefully, but I'm curious about common misconceptions that you see about pricing and packaging. Less mistakes, more misconceptions.

Number one, people think that pricing is something that they need when they have a product. Or when they are ready to go to market. Whereas, you know, pricing really is something that you need to start thinking about from, from the start, you know, when you have a concept about building a product, because then through the pricing process, it will help you to determine whether this product you're trying to build has monetization power. And if it doesn't, then, you know, you might want to reconsider whether you still want to go down the path of building that product. And I felt like You know, even with organizations like where I used to work, people would have something ready and then they come to us and saying that, hey, we have this product, like, you know, how should we price this? How should we go to market? And it's already too late. And I'm talking about, you know, like international companies, right? This is not even startup or coming from someone who doesn't have an idea of what pricing is. And that sort of suggests to you, like, how prevalent this issue is, like, how misunderstood pricing as a discipline really is.

Well, just to underline that, I mean, you're saying, hey, there are major Fortune 500 corporations who are making this mistake where pricing is an afterthought. And the same is true of startups where, like, you have an idea but you don't seek to validate whether there's a market that would pay for that idea, and you go build for a couple years and you find that nobody can— nobody will pay for it.

Exactly.

Yeah. Are there any other misconceptions that feel as prevalent or as important, or is that, is that the most important?

To me, pricing has to start at the same time as product concept. It's probably number one. Other problems, there are a lot, you know, like for example, like raising prices. I feel like people fear about increasing their prices. But a lot of the time, this is something that I always say to people, raising prices serves multiple purposes, not just of, you know, generating more revenue. It can also help you to get rid of some customers that's probably not worth having. Because, you know, again, back in my days in insurance, we have this concept of fat risk. Fat risk basically means that, you know, you issue an insurance policy, but the customers are not profitable. So in some cases, you are actually better off not keeping those customers. And the way to not keep those customers is by increasing your prices so that they will go to competitors and not come to you. And I feel like that concept probably needs to be popularized a little bit more because people think all business are good business, whereas in fact, I don't—

That's an amazing analogy. I know it so well firsthand. I've been through a number of migrations and the fear is real and it would be so liberating and clarifying were we to say this is actually going to be very good for the business. The business has evolved a lot in the last 3 years since our last price change, which is a problem in and of itself, I know.

Yeah, again, you mentioned something quite important. How often do you revise your price, right? Uh, you know, in my previous job, there are some markets who hasn't refreshed their price for 5 years. Can you believe it? 5 years, that's a very long time for not having a pricing review.

As you think about the journey that you are embarking on now to help bring more awareness to these things, have you isolated on a type of client or customer that you want to work with, or are you still determining that?

I kind of feel like I'm taking a slight pivot right now. I want to focus a little bit more on structured communication because I felt this is what pricing professionals really need, because I mean, if you go on LinkedIn, for example, when I first started writing on LinkedIn, I've been told that, you know, because I didn't have any followers, I should really start engaging with big pricing influencers so that through their network I can really hear about what the pricing challenges are. So I was like, okay, so how do I find a pricing influencer? You know, I was like trying out all the different keywords, but they simply don't exist. You have It's very difficult to find, firstly, a pricing person has a large followers. Secondly, even if they do, they don't really post on a regular basis. So it took me a while. Now I have a few people that I interact with frequently, but to start with, it's very difficult. And I started working with— so I'm going to take some professional photos next week. And then my photographer was like, you know, I was trying to help you do some competitor analysis, but I couldn't find anyone who's in the space of pricing. Like, yeah, I understand your problem firsthand because we don't put ourselves out there. So it's very hard to find someone that you can follow. Actually, I don't even know why I'm talking about this. I felt like we're talking about communication and I'm talking about why it's so difficult to find someone in this space.

To that point, I mean, pricing, pricing and communication go hand in hand. Pricing is cross-functional. Pricing and packaging decisions must have substantial executive alignment, even when there are different functions that may have slightly misaligned incentives. I've, I've had some people say to me that the cross-functional nature of pricing communication, the executive nature of pricing communication that is required to drive a really strong pricing muscle or practice within a business is the hardest part of the job. And I'm curious to get your thoughts on that.

Yeah, 100% agree. I think, you know, pricing, I see ourselves as a bridge, right? We connect with finance, marketing, sales. So each of those departments has different priorities and different incentives. So how do you align their interests, come up with a pricing proposal that benefits everyone? And you know, it's not an easy task. So to do that well, I think at the very core of it, it's communication. Firstly, you need to be an active listener so that you get to know what they care about. And then once you know what they care about, then you can start trying to align everyone's interest. So yeah, most of the time it's not really, it's never a price point problem. It's always trying to figure out what they are trying to achieve and how you could use pricing as a lever to help them to achieve their Can you share a story about a time when you personally were unsuccessful at communicating or persuading a team around a change and what you learned from it? I've been unsuccessful in many occasions, especially when you work for like large organizations where everyone will care about different things. Yeah, I think what happens on a quite regular basis is when I was working for the bank, I look after pricing for, you know, all of our major markets basically. In certain markets, the competitive pressure is really high, so they constantly, you know, feel the pressure from the market that they feel they need to drop the price. So every pricing conversation starts something like, we need to drop the price. And many times we try to push back because, you know, once you start dropping the prices, really one way to go, which is going down. And once you there, there's really just not much of a margin for everyone to share. Sometimes we succeeded by saying that actually you don't have a price point problem, you have a communication problem. Your customers don't really understand that actually we are not that more expensive than our competitors, and even if we are, you know, there's a good reason for it. But we are not always successful in that front, you know. Sometimes we have been pushing a position where we have to say, okay, we understand you also have a lot of pressure from your salespeople, maybe we need to revise the price points here and there. So I wouldn't say every conversation is, you know, successful, but we try our best to sort of like look after the margin.

Yeah, it's a great example. What about tools that you've picked up, you know, to become a better communicator, a more persuasive communicator? Are there any that come to mind?

Well, we kind of discussed about the book The Pyramid Principle. Yeah, that's really for me the Bible. And I love it because it really highlights how important having a good foundation is. And to me, the foundation here is always be clear about what problem you are trying to solve so that when you talk to your stakeholders, you can always present the solution. So I would say for me, in terms of tool, that that's probably a good tool to have, just always have this structured framework because most of the time, People come to us, but they don't necessarily have a clear problem statement in their head, right? So it is through this conversation and discussion, we help them to uncover what the real problem is. And once we are there, then it's much easier to come up with a solution rather than just like, you know, attributing every problem as a price point problem. I think having a structured framework to define the problem statement is very important.

Yeah. And you're describing Barbara Mento's Pyramid Principle. And I am a self-proclaimed Barbara Minto fanboy and complete evangelist. So I'm right there with you. I think it's, for me, it has been probably the single most important tool. For those listeners who don't know what it is, the Pyramid Principle, can you break it down and help people understand what it really is, what it's all about?

So basically it's a structural framework for effective communication. And if you imagine like a pyramid, which kind of looks like this, right? So the idea is to always present the most important idea, and that kind of goes on top of the pyramid. And then you can have a second layer, which are your supporting arguments to support why you come up with that recommendation. And if you want, you can go a layer down where at the bottom you will present facts or visuals, whatever, to support the points you've made in the second layer. Yeah. Is that clear enough? Or I'm happy to provide an example too.

It's great. And I, yeah, maybe an example would be great. But one of the things that you were saying before you even broke the pyramid down is one of the benefits of this structure is it allows you to align on the problem that you're trying to solve, which is such a common mistake where we're speaking past each other. So we might actually be like, I'm thinking about a different problem than you are. Therefore, you know, our kind of emotional, psychological, intellectual response to the provided answer is way off because we haven't even been on the same page about the problem to begin with.

Exactly. Yeah. So I think in the book, they also talk about situation, complication, resolution, right? And situation basically is like the now, right? The context, the fact, everything that's happening now. And the complication is something that changes this equilibrium. And then because of that, you need to come up with a solution. I think a lot of the times, especially when it comes to business, you will be facing with like so many different facts and information and to define what is really the situation and what is the trigger point that you have to take some action becomes really blurred. So just by getting everyone on board, like sit together and sort of like go through that exercise really helps to sort of like craft out the problem statement before jumping into, you know, looking for the solution.

Yeah. If we were to try to put an example that's tailored to pricing in front of people, can we come up with like a really simple hypothetical example where the Pyramid Principle, situation, complication, resolution? Let's try to make it visual for listeners.

Sure. I think the example I briefly mentioned before can be good. So for example, I have my stakeholders coming to me saying that, Claire, we have a pricing problem, we need to drop price, uh, we're getting too much pressure from our competitors that we are too expensive. So when I started looking into the pricing, I was like, you know what, we might be expensive in one or two parts of our offer, but not everything. Why is the customer saying that we are the most expensive in the market? So we started like basically digging down all the facts, you know, in what sector are we expensive, by how much are we expensive. Through by gathering this fact, we sort of lay out the story that, you know what, actually people think we are expensive because we have been expensive for a long time, but we've dropped our price, but we didn't really communicate this price drop effectively to our customers. So in their mind, they still think we are expensive when in fact we are not. So just by simply listing out all the facts, you have something very concrete to present to your stakeholders and go, hey, look at this, you know, you are telling me customers think we're expensive, but maybe you should do a better job at communicating our price drop to, to the audience.

Yeah, it's a great example. So, and just to riff on it for a second, I mean, I One of the things that I'm thinking through is in my own work, when I used to have to try to present arguments to executives and really try to rally executives, I felt like often the hardest work was aligning on the complication. And I wonder if you think that— I mean, the answer was retrievable. If you did the work, if you looked hard enough, you could find the answer. But it was often where the complication or the problem or the change was hardest to drive alignment around. And In some, in some cases, that was because misaligned incentives around agreeing on that particular complication. I wonder if you have seen that before or feel that that holds weight or truth.

I 100% agree with you that aligning on complication is very difficult. And sometimes we'll have to go through several rounds and every round people will think complication depending on how you look at things, it might be very different. So in my mind, I don't think there's necessarily as one complication. I think we probably just need to be comfortable that perhaps in certain situations there are 2 or 3 different complications depending on which lens you are looking at your problem, right? What's more important is probably trying to get that alignment and it could be, okay, we think this complicated— we think the problem with this complication through the lens of a product person, and given the time constraint and budget constraint, let's solve this first. And then maybe in round 2, let's look at the complication from the perspective of a salesperson. That's probably how I will approach that. Yeah, but I probably need to reflect this a little bit more, um, because I, you know, I did like the effective communication workshop and, you know, even in that workshop where I use a very simple example, trying to get people to map out the complication, always have different results. So that kind of just highlights how, yeah, it's not an easy task.

One additional thought that's coming to mind for me is when someone, especially some, the Pyramid Principle is applicable basically for the entirety of one's career. But if one can learn the Pyramid Principle early on, it's force multiplying for their career. Because when folks that are senior to them ask them questions, their answers are usually so persuasive and so accessible. So maybe a better way to describe them is an answer that is framed with the Pyramid Principle becomes an answer that is very easy to act against, take action against.

Yeah.

And so in that way, it is, it really greases the gears of collaboration, which is very, very essential, especially let's, let's take this back to startups, any company, but especially startups where speed is, is really the weapon and the advantage. And I just wanted to, no question there, but that, that strikes me as something that has always been compelling to me about Minto's work is that if it is adopted by companies almost as a, as a way to normalize communication, It is a powerful force multiplier on collaboration and collaboration speed.

I think even without the Pyramid Principle, whenever we give our recommendation, I think it's our responsibility to make sure that it is always actionable. Because for me, a recommendation without triggering any action is not a good recommendation.

Yeah.

So, yeah.

I want to ask you one more question about communication, and thank you so much for this time. I know you have to jump soon. Communication in the context of, let's say for lack of a better word, compelling teams to be bold or compelling investors to take risk can often take one of two lanes. It can take a very confident, assertive, I know the answer lane, and it can take a very sort of thoughtful, cerebral, I've understood every potential risk here and I have a risk mitigant to every potential risk here. And those two lanes are quite different stylistically and in terms of the emotional response that they can elicit. Curious if you agree with that and how you might reflect on those two choices that especially startup founders are often confronted with.

Is the question more around Is there a preferred stylistic choice or is it— sorry, I'm just trying to understand the question.

It's a very half-baked question, but it's— I think founders struggle and I have certainly struggled with this. Do I go confidently assert a direction or do I present a really unambiguous fact-based, here are the risks and the mitigants. And which is the better, better one to use as a leader? And I think the answer is probably it's situational independent, but these are major stylistic differences.

Yeah, I mean, for me, I will probably go back to who is the audience, right? So some audience prefers you to tell them exactly what to do, whereas others want you to take them on the journey. So depending on who you are talking to, you might have to select your communication method accordingly.

Um, and what's, what's also the answer to your long question? No, no, it is the correct, it is the correct answer. The irony, right, is like, or the interesting part of that is how do you know who the audience is? I mean, especially if you take, for example, like an investor, if you're a founder and you're trying to communicate to investors, investors probably want to say, I want you to kind of give me the facts and like take me on the journey and help me see the rationale. But also investors want you to just go make, make it happen and get it done, you know, check back when you've won. You know, it's, it's an interesting sort of, um, I don't know, that's all I can say about that.

I think— sorry, go ahead. One final point. I think in terms of preparation, you know, especially we're talking about talking to potential investors, is you always have to be ready for all types of situations. So in your back pocket, you should have a list that allows you to jump and act on any situation, right? And then depending on how the conversation goes, you might play different cards. You know, if you sense that they just want to have an elevator pitch, then, you know, you'll deliver your 2-minute elevator pitch. But if they want more facts, then you can, you know, back to the Pyramid Principle, you know, once you go over that, you can dig down even further. You start presenting all the facts and everything to show them that you've done your work. So yeah, preparation is king. You just have to make sure you are well prepared.

Preparation is king and multiple forms of communication in your back pocket is such a good takeaway. Claire, thank you so much for this time. One question I always like to ask at the end is, is there a moment, like a very specific moment in your career that you feel is maybe the most influential or formative moment in your career?

Yes, I guess I would say it was losing my job through a corporate restructuring that kind of basically triggered me to do everything I'm doing right now. And I felt like it definitely helped me to reflect on what I want to do for the second half of my career. And also being a bit more, yeah, probably being more mindful about what I want to do in my personal time as well. So, you know, yeah, I guess long story short, you know, for the second half of my career, I kind of want to have it more balanced, you know, professional life, personal life. But, you know, I love my work, but I don't want my work to become, you know, 100% of my life. And I think a lot of people would probably resonate with that, especially after COVID. We all started think, okay, what is it that we want to achieve? Yeah. And work should be part of life, but not, you know, 100% of your life. And I think that's probably what this restructure has taught me. And I'm very grateful of this opportunity to kind of be on this journey. And I'm still on this journey, but I'll keep you posted on how it goes.

Thank you so much for sharing that. That is a very formative moment. It's been so good to get to know you. Where can people learn more about you?

Probably LinkedIn is the best place. To reach me. Yeah, so feel free to send me a connection request, and I have a pricing newsletter, uh, so if you're interested in learning more about pricing or learning more about my journey, uh, you should subscribe to my newsletter.

A link to your website in the show notes. And thank you again, this has been so much fun.

Thank you, thank you for the invite, and enjoy the rest of your day.

You too. Ciao ciao.