Price Compression

Price compression, the idea of buying today with the expectation that future earnings will justify current prices, is something UCaaS companies grapple with, especially in a complicated economy.

“We’re holistically at RingCentral looking at our pricing model, said Wendy Harmon, assistant vice president of channel marketing at RingCentral. “So, it’s not just looking at one specific aspect, but we step back and look at all the value add throughout the entire portfolio and price according to that.The point is ultimately people pay for value. You should be able to align your pricing model to fit where those high value points are. I think it helps to be able to reduce in some areas and increase in other areas. It’s a balance.”

Day said GoTo has stayed in tune with the consumers and the partners to understand the products that the company is creating, building, implementing, and integrating to answer the market of “what people want now” in the UCaaS space.

“There are always the bells and whistles of who has what, but not every consumer needs every piece of it,” Day said. “So how are we able to now tailor the platforms and create bundles of products that consumers want to use so that they can say this is exactly what I’m looking for. And the whole price conversation isn’t there because you’ve built the value of a platform from what the consumer wants.”