Ryan Campbell, Director of Product Finance at Snowflake and former Air Force officer, discusses the transformation of Snowflake's pricing model. He explains their shift from cost-plus to usage-based pricing, highlighting the need for simplicity in customer billing. Ryan shares insights on aligning pricing with customer value, the complexities of AI pricing, and the importance of implementation details in price transformations. He also touches on predictive methodologies for fluctuating usage patterns and how pricing strategies connect with overall business goals.
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question_answer ANECDOTE
PE Pricing Transformation Experience
Ryan led a pricing transformation for a PE portfolio company that hadn't raised prices in three years.
The process involved deep packaging analysis, market research, and a challenging price increase rollout with sales pushback.
volunteer_activism ADVICE
Key Pricing Transformation Advice
Keep the core pricing team small to reduce churn and focus on core issues.
Never raise prices without delivering incremental or new value to customers.
volunteer_activism ADVICE
Implementation Dominates Pricing Work
Pricing transformations spend most time in implementation and rollout phases, not just design.
Detailed planning of rollout mechanics and coaching internal teams is critical for success.
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In this episode of Unpack Pricing, Scott Woody, co-founder and CEO of Metronome, talks with Ryan Campbell, Director of Product Finance at Snowflake.
Ryan shares how Snowflake has evolved pricing from a cost-plus infrastructure model to a sophisticated usage-based platform, requiring fundamental changes to their pricing philosophy and implementation. He reveals his three core lessons from McKinsey pricing transformations, how Snowflake built pricing principles to enable organizational scaling, and their significant shift from compute-time billing to data-volume pricing for products like Snowpipe to reduce customer friction. The conversation explores how Snowflake successfully balances simplicity with flexibility in consumption pricing, their approach to cost governance tooling, and how they align pricing metrics with customer value rather than internal costs. Ryan also discusses their forecasting methodologies for volatile usage patterns, the challenges of AI product pricing complexity, and why implementation details are the most underestimated aspect of pricing transformations.
FULL TRANSCRIPT AVAILABLE HERE:
https://www.linkedin.com/in/ryancampbellairforce/
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Check out:
Snowflake: http://www.snowflake.com/
Metronome: https://metronome.com/
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Timestamps:
(00:00) Intro
(00:58) Ryan shares his background at Snowflake, McKinsey, and the Air Force
(02:08) How McKinsey's consulting work led Ryan into pricing expertise
(03:32) Ryan describes executing a comprehensive pricing transformation for a PE portfolio company
(08:08) The three key lessons Ryan learned from his first pricing project
(11:51) Why implementation takes 75% of the time in pricing transformations
(14:01) How to communicate price increases and reset customer expectations
(19:57) Why companies are afraid to raise prices and how to overcome that fear
(24:19) Where pricing sits organizationally at Snowflake and why it moved to finance
(29:28) How Snowflake redesigned their pricing committee
(33:11) Why pricing principles enable faster decision-making and organizational scaling
(36:15) Making consumption pricing transparent and controllable for customers
(39:00) Snowflake's investment in native cost governance
(42:14) How Snowflake changed Snowpipe pricing from compute-time to data-volume
(46:45) The challenges and solutions for forecasting in usage-based business models
(53:27) Navigating AI pricing with tokens, agents, and outcome-based models
(1:00:29) The future of pricing innovation
(1:01:52) Wrap
"Unpack Pricing" with Scott Woody