Inside Snowflake’s pricing strategy with Sam Lee

"Unpack Pricing" with Scott Woody

In this episode of Unpack Pricing, Sam Lee, VP of Pricing Strategy and Product Operations at Hubspot and former Snowflake pricing leader shares his deep expertise in building and scaling pricing teams. He joins host Scott Woody to explore why pricing “is a sledgehammer, not a scalpel” in business strategy.

Sam discusses why pricing is inherently challenging as a multidisciplinary domain, shares insights from Snowflake's successful consumption-based pricing strategy, and explores how AI is reshaping traditional pricing models. He also offers insights into the future of AI-driven business models, suggesting a shift where data exchange between companies and customers could fundamentally alter commercial relationships in software.

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FULL TRANSCRIPT AVAILABLE HERE: https://metronome.com/podcast/unpack-pricing/inside-snowflakes-pricing-strategy-with-sam-lee

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Follow:

Scott

https://x.com/l3amm

https://www.linkedin.com/in/scott-woody-21677121/

Sam

https://www.linkedin.com/in/samwise/

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Check out:

Value Monetization in the Age of AI, Sam Lee

https://medium.com/value-monetization-in-the-age-of-ai/value-monetization-in-the-age-of-ai-5cafce30332e

Metronome:

https://metronome.com/

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Spotify: https://open.spotify.com/show/5hJzs0gDg6lRT6r10mdpVg

YouTube: https://www.youtube.com/@ModernRelationshipsPod

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Timestamps:

(00:00) Intro

(01:07) Why is pricing so hard?

(01:14) Sam's three reasons why pricing is difficult

(05:57) Top-down vs. bottom-up pricing initiatives

(07:50) Essential skills for effective pricing leaders

(10:02) Product expertise & pricing outcomes: The Snowflake Copilot example

(11:49) The price-value-product experience feedback loop

(14:19) Pricing managers as product managers for the monetization system

(17:22) Criteria for choosing value metrics: Alignment with customer perception & cost scaling

(19:50) Advantages & disadvantages of a pure usage philosophy

(26:39) Operationalizing pricing changes in a usage model

(28:03) Handling greenfield vs. brownfield customers

(35:09) The rarity of successful outcome-based pricing

(41:19) Advice for transitioning to usage pricing

(43:05) Skillsets needed for usage-based pricing

(46:20) The weird future of pricing

(59:32) Wrap