Case Study: Transform Sales Teams with Customer Insights

Sometimes, the toughest barrier to a successful pricing shift is internal resistance. When teams resist, even the best-laid pricing strategies can fall short. Yet, by harnessing the power of direct customer insights, these barriers can be dismantled. For the client in this case, allowing their Sales team to listen to customers’ candid appreciation of the platform’s unique value—and hear their willingness to pay more—proved pivotal. This direct exposure shifted Sales’ mindset from staunch resistance to enthusiastic support. As a result, the company transitioned smoothly from a fluctuating transaction-based model to a stable, value-based subscription structure, boosting both revenue predictability and customer loyalty collecting an incremental £4m in the process.

Situation

A PE-backed B2B  payments platform in the UK hired us to rationalise its fragmented and unpredictable pricing strategy. Founded as a start-up, the company had grown rapidly to a £100 million business over six years, yet each customer was still priced individually, often during ad-hoc negotiations led by Sales. This highly customised approach resulted in major pricing discrepancies across the customer base.

A PE-backed B2B digital platform approached us with an ambitious challenge: to make sense of a pricing strategy that had become fragmented and frustrating. Originally a scrappy start-up, the company had grown into a £100 million enterprise within six years, but its pricing model hadn’t evolved. Each client had their own custom pricing, negotiated ad-hoc by Sales, leading to wild discrepancies across the customer base.

The company’s reliance on transaction fees generated volatile monthly revenue, creating forecasting challenges. Even more frustrating was the Sales team’s resistance. Many had been there since the company’s early days and believed they were already charging the most the market would bear. Conversations with Sales were tense, often rooted in the mindset that customers valued only low-cost processing and would resist any new pricing structure.

This was familiar territory: a team entrenched in a “commodity mindset,” struggling to see the platform’s potential for premium value. But could we help them see it through the eyes of the customer?

Challenge

The firm faced several interconnected challenges in its pricing transformation:

• Sales Resistance to Change: The Sales team was convinced that customers prioritised low prices and that any attempt to raise prices or introduce a new model would drive them away. They were sceptical that clients valued the platform’s unique features or would support a shift away from the transaction-based approach.
• Revenue Unpredictability: The transaction-based model resulted in fluctuating monthly revenue, creating significant forecasting challenges for the Finance team and limiting visibility into future cash flows.
• Billing Complexity and Revenue Leakage: The transaction-based model required each transaction to be tracked and billed separately, making the billing process cumbersome and prone to missed charges, resulting in revenue leakage.
• Inconsistent Pricing: Each customer had a customised pricing structure, leading to significant discrepancies across the client base. This inconsistency made it challenging to establish a predictable revenue model that could reliably support both the business and client needs.
• Competitive Pressures: New entrants were emerging, promising customers solid alternatives. Competitors’ platforms threatened to capture clients who could easily split transaction volumes to avoid dependency.
• Investor Concerns: Potential investors were wary of the company’s lack of pricing clarity, viewing it as a risk to their investment.

Method

To address the Sales team’s resistance and test assumptions about customer preferences, we organised direct conversations with customers. This allowed us to hear client perspectives first-hand, which proved to be far more effective than us simply presenting data. Through these interviews, we collected undisputable insights:

• Perception of Commodity was caused by the transaction-based model: Comparing low per-transaction prices (often just a few pennies) created an impression of similarity, and advantaged clients in negotiations despite the platform’s unique offerings.
• Customers Were Willing to Pay a Premium: Contrary to Sales’ beliefs, customers expressed a willingness to pay more for the platform’s unique capabilities.
• Demand for Predictability: Many clients voiced frustration with transaction-based pricing and expressed a preference for stable, subscription-based plans, even at a premium.
• Preference for Stability: Customers disliked frequent monthly cost fluctuations, which made their own budgeting difficult, and desired predictable, stable pricing.

These insights painted a different picture, one that shattered the belief that low-cost processing was the platform’s only value proposition.

Solution

Armed with these customer insights, we developed a scalable, subscription-based pricing model that aligned with both client preferences and company needs, improving revenue and operational efficiency:

1. Transition to a Subscription Model: We recommended shifting from a transaction-based model to a subscription-based approach, creating a foundation of recurring revenue.
2. Value-Based Pricing: Capitalising on the platform’s market-leading status, we introduced a premium subscription rate justified by the platform’s unique technology and the capabilities it offered customers.
3. Enhanced Value at Higher Price Points: For customers facing a price increase, we offered additional service allocations, enhancing perceived value and easing the transition to the new model.

Outcome

The shift to a subscription-based pricing model generated £4 million in additional revenue from a scope excluding the top 3 largest customers (7% increase in revenue), with customers readily accepting the new pricing structure in exchange for predictability and extra allocations. Sales, who had once been the most resistant to change, initially adamant that clients valued only a low-cost, basic model,  embraced the new approach, buoyed by the knowledge that customers valued stability and premium features. They shifted from defending the past to advocating for a future that aligned with both customer expectations and financial objectives.

KABEN’s intervention was crucial in challenging the status quo and driving a transformative shift in the company’s pricing strategy. By taking Sales out of their comfort zone, we encouraged them to confront deeply held assumptions about customer price sensitivity and the platform’s perceived value. Through direct exposure to customer insights and a data-driven approach to market expectations, Kaben enabled the company to transition from a volatile, transaction-based model to a stable, subscription-based approach. This experience left the company better prepared to meet competitive challenges and positioned for sustainable, long-term growth in a rapidly evolving market.