This project is intended to give an overview of the Monetization Strategy for this Tool.

Background about the tool :

At present, Internal Functional Consultants as well as External Third Party Consultants are not aware of the configuration migration process. Improper configuration migration steps lead to delayed production deployments with inaccurate configurations. As a result, Clients lose trust and confidence in HighRadius products. The impact of improper production config migration ultimately gets reflected in our NPS score.

An automated and accurate process to move the configuration data from the UAT to the Production environment is important to:

1. Prevent delays
2. Avoid inaccurate configs
3. Ensure Clients’ trust

Monetization Validation

Litmus test

Note : For this assignment, hypothetical numbers are plotted by lowering down original numbers using a scale to ensure privacy.

Few notable insights from above data :

1. Retained Users : Retained users started at 750-800 range since the tool was launched back in Jan 2023 for the entire HighRadius consulting org. Since launch was done by conducting live workshops hence all consultants across geographies got first hand experience of the tool and started using it for their next set of live projects.
2. Churned Users : Given the fact that we did product launch to support config migration use case for only Net New Implementations which was 40% of all projects signed up for 2023 delivery for Highradius. Hence even though all consultants experienced the tool but could not use it extensively hence adoption went down and the curve got flatten out towards Q3 2023.

Overall, in Q4 2023, given we have added additional capabilities to support additional use cases for migrating Cross-sell & Up-sell projects using the tool hence there is a slight increase in #users towards Jan 2024. Getting into 2024, we expect the retention to go further up and increase in usage of the tool.

Deeper Engagement

Since its a B2B tool, the more the consulting leaders (for their respective teams) and consultants use the tool for migrating configurations from UAT to Production, more the dependency on the tool increases since it save time (~80% lesser than what they were taking earlier) as well as build client trust due to less number of issues post go live.

For this assignment, I will segment the ideal users into Casual, Core, and Power users.

For Config Migration Tool :

• Casual users are represented by VP Partnership. Although they have a high decision-making capability and spending authority on tech tools, their tech stack adoption is generally low. Their main tasks revolve around overseeing the entire Implementation Projects portfolio and making high-level decisions.
• Core users encompass the internal consulting leaders who possess high decision-making ability and high spending authority on tech tools; they are closely involved in day-to-day project implementation management & monitoring the progress. Their tech adoption is also high and willing to invest in tools that increase their team productivity and make the implementation cycles shorter.
• Power users are mainly the internal and external consultants who are actually using the tool on a day to day basis. Their decision-making capability might be low, but they are core to the project implementations. 

Based on the above, the core and power users comprise more than 50% of the users.

Willingness to Pay

For this assignment, I have compiled a list of 30 consultants and leaders that belong to the causal/core/power user segments for the Config Migration Tool :

Here are the potential answers we have received from each user segment:

Casual Users

1. How much would you pay for the product? “I would be willing to see a demo first and start with let's say with 5 licenses if it adds value, post first quarter would like to see results and accordingly scale it further for my team”
   
2. Would you pay for this just once? “Yes, I would prefer a typical quarterly user based pricing model given I would have flexibility to ramp up/down the pricing based on org needs”
   
3. Would you pay for it on a recurring basis? “Yes, I would prefer a typical quarterly user based pricing model given I would have flexibility to ramp up/down the pricing based on org needs”
   
4. What would make you pay more? “How much value I can drive from it e.g. If it helps me track real time progress across all my projects portfolio over and beyond its core value prop, I might consider this”
   

Core Users

1. How much would you pay for the product? “I heard positive feedback across my last 5 projects. Also, it helped in completing 2 projects earlier than planned. Hence would like to pay based on efficiency gain in bring to the table”
   
2. Would you pay for this just once? “I am open to monthly or yearly subscription”
   
3. Would you pay for it on a recurring basis? “Yes, that works”
   
4. What would make you pay more? “Access to clear visibility and real time monitoring about efficiency gain across all my team members. This can eventually become input for evaluating individual KPIs and driving client discussions”
   

Power Users

1. How much would you pay for the product? “Given it adds a huge value to my day to day work in terms of time savings, I am happy to pay premium for it”
   
2. Would you pay for this just once? “I would prefer a quarterly subscription for this”
   
3. Would you pay for it on a recurring basis? “Absolutely, given it helps me cancel subscription if tool performance goes down or it does not cater to varying nuances across different project implementations”
   
4. What would make you pay more? “Anything that lead me stand out across my team members - helps me someway to finish projects very quickly in a guided way without depending on customer support ”
   
   

Above reflects a positive inclination towards monetization readiness and a willingness to engage with the tool product at varying levels of commitment and satisfaction. 

Hence, the Config Migration tool has passed the Litmus Test for monetization readiness.

1. Retention – Flattened out retention curve leaning towards smiley. 
2. Deeper Engagement –  50-60% of users are Core Users
3. Willingness To Pay – Users are definitely willing to pay especially for higher efficiency gains and real time project lifecycle tracking

Substitutes & Pricing

Core Problems Solved by Config Migration Tool

Business Outcome : Faster revenue realization across cloud implementations.

Core Product Value Prop : Faster, better and cheaper project deployment from UAT to production thereby

1. Prevent delays during project go live
2. Avoid inaccurate configs in production system
3. Ensure Clients’ trust

Beyond this core problem, config migration tool also solves for :

1. Self serviceable Diagnostics : Intuitive and actionable diagnostic report providing insights based on type of error encountered e.g. who to connect. Empowering them to fast track collaboration across different departments.

2. Support across varied implementation use cases : Tool enables multiple use case migration namely Net new sell, Up-sell, Cross-sell, Phased Implementation, Multi-geography migrations etc.

3. Real time time savings report against plan : Leaders can check and track time savings across projects against their project plan which helps drive success of cloud implementations and open opportunities for up-sell or cross-sell.

4. Team Efficiency Reports : Consulting leaders can track efficiency gain across all their team members across multiple projects and accordingly plan for productivity improvement initiatives e.g. product trainings, best practice implementations training plan etc.

Solution (Use case)

Config Migration tool offers custom config migration workflows for different types of use cases which are intelligently designed following consulting methodology setup within Highradius.

Helping consultants navigate through the tool based on already adopted product implementation methodology ensure minimal time spent on training etc and start value realization from week 1 post usage.

Summarizing, it helps : 

For Consultants  : Self service guided workflow for faster and accurate config migration thereby increasing productivity.

For Consulting leaders : Drive faster business growth and real time value realization starting week 1 with no or limited time spent on team training.

Competitors Pricing

Product Buyer Evaluation

There are several factors that a B2B organization must consider while selecting the right data migration tool. Some of them include (along with potential weights): 

Scalability (7)

Make sure that the tool chosen can scale to handle large data volumes effectively. It should be able to grow alongside your organization’s needs.

Reliability (9)

Consider the reliability of the data migration tool to maintain data integrity and minimize downtime during migration projects. It should offer robust error handling and recovery features to ensure a smooth migration process. 

Compatibility and Adaptability (8)

Opt for a tool that seamlessly integrates with your existing systems and adapts to different data formats and sources. This flexibility is crucial when dealing with diverse data sources and technology stacks. 

User-friendly Interface (7)

Look for a tool with an intuitive design and clear usability that can significantly enhance the efficiency of your migration process, reduce the risk of errors, and ensure smoother data transfers. Prioritize tools that are easy to navigate and require minimal training for your team. 

Regulatory Compliance (9)

Confirm that the chosen tool adheres to relevant industry standards and data protection regulations such as GDPR, HIPAA, etc.  

Customization and Extensibility (7)

Ensure that the tool empowers customization and extensibility to accommodate unique data migration scenarios.

Design Pricing

Pricing Design

Who to Charge : Third party consulting teams who want to improve their efficiency within project implementations lifecycle and thereby drive business growth by implementing more projects at a 2x or 3x rate.

When to Charge : Tools core and power users should be charged when they have experienced the perceived value - Completed cloud deployment of at least 5 projects in less than 80% of time than before. 

What to Charge : Tool Core Value prop is to save time by automating the cloud deployment process by making it faster, better and cheaper. Hence it should be based on time (Man hrs) saved per project migrated using the tool.

How Much to Charge : Let’s look at perceived Value and Perceived Price

Perceived Value Gained From Config Migration Tool → 💡 Productivity.

Perceived Cost Saved From Config Migration Tool  → ⏱️ Time Saved

We will consider a value based pricing model in this case, since its recommended strategy for SaaS companies. With this approach, we charge customers based on the value they derive from using our product. The more value our customers receive, the more they are willing to pay. To implement value-based pricing effectively, we first need a deep understanding of our customers, especially their needs and pain points. Then, we must identify the appropriate value metrics and price points and refine our pricing terms.

Our strategy for value-based pricing primarily relies on two key metrics:

Pricing = 

(# Net New Projects implemented * #Avg Man hours saved per project) + 

(# Cross-sell Projects implemented * #Avg Man hours saved per project) +

(# Up-sell Projects implemented * #Avg Man hours saved per project)

1. Choosing our value metric. For the Config Migration Tool, our pricing formula is based on the following metrics: the number of projects implemented * Avg time taken in each project. Evaluating this across all types of projects (namely Net New, Cross-sell & Up-sell) and finally summing it up.
2. Determining the price point : This involves calculating the cost to acquire a new business consulting firm, which includes expenses such as referral programs 

Value Metrics

How to Show Pricing

System 2

System 2 is a better choice over System 1 in this case given its B2B tool with High AOV, longer sales cycle and need for product customizations.

We will proceed with designing pricing page offering pricing for 2 categories :

1. Basic : For Mid Market Project Implementations, This is for small projects involving only out of the box product features migrations with no scope for customizations
2. Enterprise : For Enterprise Project Implementations, This is for mega projects involving multi product implementations with customized product migration workflows based on type of projects e.g. Net New, Cross-sell & Up-sell including customer support during business hours based on geographies