Ashish Nayyar’s Visionary Pricing Strategy In Enterprise Software Industry

Ashish Nayyar is a seasoned Value-Based Pricing & Commercial leader with a wealth of expertise spanning more than thirty years. Renowned for his expertise in Value-Based Pricing for Enterprise Application Software Products, his experiments have consistently created significant impact and pioneered industry advancements. Ashish's mission is to transform how pricing strategies influence strategic growth and assert market leadership. Collaborating closely with C-level and executive teams, he leads initiatives to refine pricing structures, aiming to significantly enhance profit margins and propel business growth.      

1. Can you please elaborate about your journey, contribution in Nucleus Software, and your key achievements?
My journey at Nucleus Software has been both transformational and rewarding. Over the course of a decade, I spearheaded a paradigm shift in the approach to pricing, moving from traditional models to a more innovative, value-based pricing framework. This strategic shift not only drove a significant increase in revenue and profitability but also positioned Nucleus Software as a leader in the industry, recognized for its innovative and customer-centric approach to pricing.
Let me briefly reflect on my journey prior to joining Nucleus Software. My journey into pricing began at France Telecom as a Sales Director, where I secured one of the company’s first and largest deals in India, connecting the State Bank of India’s International Branch network via a secure private VPN. This experience laid the foundation for my understanding of value-based pricing. Subsequently, I took charge of the Global Product and P&L for Bharti Airtel’s ‘Enterprise Internet’ business. Initially, the unit was struggling with profitability in a highly price-sensitive market. By implementing value-based pricing and driving operational efficiencies, I transformed the business from a loss-making unit into a profitable enterprise, achieving significant growth. These experiences set the stage for my pivotal role at Nucleus Software.
Upon joining Nucleus Software as a part of the Global Strategy function, the company was grappling with a significant challenge: although their customer base was expanding rapidly, revenue growth was not keeping pace.  Recognizing the pressing need to redefine the pricing strategy, I spearheaded the transition to a value-based pricing approach, aligning it with the value the company delivered in a rapidly evolving market.
One of my notable achievements was the development and implementation of a multi-dimensional value-based pricing engine, which utilised dynamic pricing algorithms and advanced analytics to tailor pricing to each client’s specific needs. This shift was instrumental in driving significant revenue growth and strengthening customer relationships. As an example, it drove a 30 per cent increase in revenues and a 50 per cent rise in profit after tax during the fiscal year 2023-24.

2. Could you elaborate on the concepts of value-based pricing and the pricing engine?
Value-based pricing is a transformative, customer-centric strategy that goes beyond traditional pricing models by focusing on the perceived value a product or service delivers to the customer, rather than merely covering production costs or matching market benchmarks. This approach demands a profound understanding of the customer’s unique needs, preferences, and the specific value proposition of the offering. It’s about shifting the pricing conversation from "What does it cost us?" to "What is it worth to our customers?"
At Nucleus Software, I spearheaded the development of a multi-dimensional Value-Based Pricing Engine, a sophisticated tool that integrates dynamic pricing algorithms and advanced analytics. This engine empowered us to tailor the pricing to each client’s specific requirements and business metrics, ensuring that prices are not just numbers, but strategic reflections of the value the company’s products deliver.
The engine delved into several critical factors, including operational efficiency gains, risk mitigation, and strategic business outcomes. For instance, it assesses how the company’s software can streamline a client's operations, reduce their risk exposure, or enhance their strategic positioning in the market. By quantifying these benefits, the engine determines a price that truly reflects the comprehensive value the company’s products bring to the customer’s table.
This approach had far-reaching benefits. First, it ensured that the full value of innovations was captured, avoiding the pitfall of undervaluing the company’s offerings in a competitive market. Second, it fostered stronger, more aligned relationships with customers by making pricing a transparent and logical reflection of the value they received. Customers appreciated this alignment because it reassured them that they were investing in a product that delivers measurable, strategic benefits - creating a partnership based on mutual success. Ultimately, value-based pricing is not just a pricing model; it’s a framework for building long-term, value-driven relationships that benefit both the company and its customers.

3. How did you go about discovering and determining the most effective value-based pricing model?
The journey to discovering the most effective value-based pricing model began with a comprehensive understanding of customers’ operations and the value drivers that are most significant to them. I led an initiative to deeply engage with the clients to identify their unique challenges, operational workflows and strategic goals. This deep dive into customer operations allowed me to quantify the KPIs and metrics that mattered most to them. I then benchmarked these findings against industry alternatives to determine the software’s differentiation value. Utilising the Economic Value to the Customer (EVC) framework, I developed a flexible pricing strategy that accurately reflected the varying levels of value different customers derived from the software products. This iterative process, supported by continuous customer feedback and data-driven insights, allowed me to refine the pricing models to ensure they were both competitive and aligned with the real value delivered.

4. What initiatives have you implemented to harness pricing strategies in order to unlock value, drive profit, and enhance market competitiveness?
At Nucleus Software, I spearheaded several strategic initiatives that utilised pricing as a powerful lever to unlock value, drive profitability, and enhance market competitiveness. Foremost among these was championing the shift from a traditional cost-plus pricing model to a comprehensive value-based pricing framework across both new and existing business streams. This transition allowed the company to price offerings based on the economic value they delivered to customers, rather than merely covering costs or reacting to competitor prices.
Building on this, I developed and implemented a multi-dimensional Value-Based Pricing Engine, a sophisticated tool that integrates dynamic pricing algorithms with advanced analytics to tailor pricing according to each client’s specific requirements and business metrics. This engine ensured that pricing was a true reflection of the value delivered, capturing the full extent of the company’s innovations while fostering deeper, more aligned customer relationships.
Another significant initiative was the re-baselining of AMC (Annual Maintenance Contract) prices using the Value-Based Pricing Engine. I recognized that the existing AMC pricing did not fully capture the substantial value being provided to long-standing customers. By meticulously reassessing the pricing structure to better align with the benefits the software delivered - the company achieved a significant increase in AMC revenue without any customer churn. This success underscored the importance of ensuring that pricing accurately reflects value, reinforcing my belief that pricing is not just a tool for revenue generation but a strategic asset that drives long-term business success.
Furthermore, I led the successful commercial launch of SaaS offering, underpinned by a strategic pricing approach that emphasised value and flexibility. By conducting thorough internal and external business case analyses, I ensured that the SaaS model was both viable and highly competitive. This initiative included the introduction of tiered pricing tailored to different customer segments - from small enterprises to large corporations - allowing us to cater to a diverse range of needs and budgets. This strategy significantly expanded the market reach and enabled customers to scale their usage according to their evolving requirements. The innovative pricing structures I developed not only drove the rapid adoption of the SaaS offering but also solidified the company’s position in the market.
These initiatives collectively underscore the strategic role of pricing in driving innovation, fostering customer loyalty, and securing a competitive edge in the enterprise software market. By making pricing a central element of business strategy, I unlocked new revenue streams, increased profitability, and enhanced the company’s leadership position in the industry.

5. What was your vision for utilising a value-based pricing framework?
My vision for utilising a value-based pricing framework was rooted in the conviction that pricing should be a strategic lever that reflects the true value a product delivers, far beyond just a tool for revenue generation. In the enterprise application software industry, where products are deeply embedded in the core operations of businesses, value-based pricing serves as the bridge between the value perceived by customers and the actual price they pay. This approach ensures that customers are charged fairly, in alignment with the tangible benefits and outcomes they derive from the software.
By adopting a value-based pricing model, companies can unlock new revenue streams and significantly enhance profitability. However, the true power of this approach lies in how these additional profits can be reinvested into continuous research and development. This reinvestment fuels ongoing innovation, enabling the company to enhance its offerings, stay ahead of industry trends, and deliver even greater value to its customers. As a result, customers benefit from products that evolve to meet their changing needs, leading to higher satisfaction and a deeper, more sustained partnership.
In essence, value-based pricing creates a virtuous cycle: the more value delivered, the more customers are willing to invest, and the more resources are available to innovate further. This dynamic not only drives long-term business growth and market leadership but also ensures that customers consistently receive cutting-edge solutions that keep them ahead of the curve. It is a strategy that aligns the interests of the company and its customers, fostering a mutually beneficial relationship that thrives on continuous improvement and shared success.

6. How do you propose to adopt pricing strategies to address the unique challenges and opportunities presented in the price-sensitive Indian market?
The Indian market presents a unique blend of challenges and opportunities, characterised by its high price sensitivity and diverse customer base. To effectively navigate this landscape, adopting a value-based pricing strategy rooted in the EVC approach is key. By aligning prices with the tangible and intangible benefits that solutions deliver, we ensure that pricing is commensurate with the value provided, making it both fair and compelling in cost-conscious environments.
In addition, the introduction of tiered pricing models tailored to different customer segments—from small and medium-sized enterprises to large corporations—will enable us to meet the varied needs and budgets across the Indian market. For instance, offering a basic tier with essential features at an accessible price point ensures that smaller businesses can benefit from the solutions, while advanced tiers provide more comprehensive features and support for larger enterprises.
To further enhance market competitiveness, I propose leveraging data-driven insights to continuously refine the pricing strategies. By analysing customer behaviour, usage patterns, and market trends, we can dynamically adjust pricing to stay relevant and competitive, ensuring that we capture the full spectrum of opportunities in the Indian market.
Ultimately, the goal should be to create a pricing strategy that is not only sensitive to the economic realities of the Indian market but also robust enough to drive value and profitability. By doing so, we can expand market reach, foster long-term customer relationships, and secure a strong competitive position in one of the most dynamic markets in the world.