In the YouTube video "EPIC SaaS Pricing Success: My Narvar Story," a former product marketing leader shares their experience leading a crucial pricing revamp at Narvar, a leading post-purchase software company used by top retailers worldwide. The case study, published in the book "Price to Scale Second Edition," provides valuable insights into how addressing packaging problems rather than price points can transform revenue outcomes.
The Inherited Pricing Mess
When the speaker joined Narvar in 2019, they inherited a recently launched pricing structure that was failing. The previous pricing revamp had created significant problems:
"I joined Narvar in 2019 to lead product marketing and the focus, the main focus was going to be on pricing because a recent pricing revamp that the company had done was not very successful," the speaker explains.
The issues were fundamental and impacting revenue:
- Cookie-cutter packages (13 packages across three product lines) that were designed for SMB customers, despite Narvar's primary focus on mid-market and enterprise clients
- Inflexible tiers that didn't map to market needs
- Falling average selling prices (ASPs) across all tiers
- Senior sales representatives ignoring the new model and creating their own pricing
- New sales representatives following the model but achieving lower deal values
Identifying the Core Issue: Packaging, Not Pricing
Rather than immediately changing numbers, the speaker conducted a comprehensive assessment. Through one-on-one debriefs with sales representatives and data analysis, they identified that the core problem wasn't the pricing metric (number of orders shipped) but rather the rigid packaging structure.
"The real blocker was packaging. The inflexibility in the tier caused unnatural selection—if a particular tier didn't work, a higher tier would be selected and then severely discounted," they noted.
This inflexibility created several downstream problems:
- Deals were lost because customers were forced into higher tiers containing features they didn't need
- When sales did close, higher tiers were severely discounted
- Customers ended up with "shelfware" – paying for features they wouldn't use
- Upselling became difficult
Balancing Competing Priorities
An interesting dynamic emerged between executive leadership priorities. The CEO, under pressure from venture capital investors to prepare for an IPO, wanted a simple pricing structure. Meanwhile, the SVP of Sales needed flexibility for enterprise deals.
"I had to also mediate between our SVP of sales and the CEO because the CEO was being relentlessly pushed by our growth stage VC to prepare for IPO," the speaker shared. "The pricing needed to be simple and he was pretty certain. But that was not our motion. The motion was bespoke enterprise sales and this was the key dynamic that had to be negotiated."
The Solution: Flexibility Within Structure
The speaker established clear principles for the pricing revamp:
- Create flexibility within tiers so customers could move without upgrading to significantly more expensive tiers
- Eliminate forced features to prevent shelfware
- Present a bespoke front-end for clients while maintaining structured packages on the back-end
- Prioritize operational ease over theoretical purity
The implementation included:
- Rationalizing the number of packages to better map to market segments
- Moving premium support from top-tier-only to an optional add-on
- Adjusting entry-level pricing that had been too low (causing reps to "double the list price")
- Developing a scalable pricing calculator that made it easy for sales to create quotes
"No feature within a tier would be something that would be forced for a customer. We did not want shelfware because if there's shelfware, customers are buying something that they're not going to use," the speaker emphasized.
Impressive Results
The pricing revamp delivered significant business impact:
"100% sales adoption and why was 100% sales adoption needed? So that we could have a rev thing that was working right. The company needed to be ready for IPO. Average selling prices then increased 15 to 40% across different tiers," the speaker reported.
The sales team embraced the new model because the calculator made it operationally simple to use, reinforcing that "operational ease is very important when you're rolling out a new strategy."
Key Lessons for SaaS Leaders
The case study offers several valuable takeaways:
- Many pricing problems are actually packaging problems: "The key metric, the value proposition, customer base, all of that was fine. But the alignment mechanism between the market and the offer was the packages and that needed solving."
- Pricing is about alignment: Success requires alignment between sales motion and packages, between executive leadership perspectives, and between company and investor needs.
- Avoid rushing pricing changes: "You can't ramrod a big pricing change. Many times as a consultant, we speak with companies, they want to roll out things fast, but if you do it too fast, it's going to fall blow up in your face."
- Focus on enablement: Training sellers and ensuring they understand how changes impact their compensation is critical.
- Prioritize your business reality over trends: "It's not all about fancy things like usage-based pricing or outcome-based pricing or GenAI models, things that you're reading in LinkedIn. It's about listening, understanding what the goals are, aligning and coming up with things from first principles."
The speaker concludes with perhaps the most important insight: "I would encourage a lack of a reliance on the trends or on what competitors are doing or on what LinkedIn influencers are saying and focusing more on what is happening on the ground in your business."
By focusing on real business needs rather than industry trends, Narvar successfully transformed its pricing approach, solved its revenue challenges, and positioned itself for future growth.