Product:

Saxo Bank delivers an extensive array of institutional services, encompassing multi-asset execution, clearing, custody solutions, and prime brokerage. Its platforms facilitate access to over 71,000 financial instruments across diverse asset classes, serving a broad spectrum of institutional clients, including banks, brokers, and asset managers.

Situation:

Saxo Bank struggled to monetize its institutional services due to an outdated pricing framework for the Saxo Advanced Solutions (SAS) business line. Developed in 2003, the framework was misaligned with the complexity of SaaS and API-driven solutions in 2020. Subsidizing new offerings with legacy trading fees created a perception of high costs in brokerage and custody services, while reliance on transaction-based revenue exposed the business to market volatility and obscured client profitability.

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Institutional Commercial Owner, Saxo Bank:

Our brokerage & custody in the institutional space has been observed as expensive, and the pricing is not representative of what we’re selling, making it hard to evaluate profitability, understand cost dynamics, and allocate product development resources effectively. We needed a solution to enhance cost visibility and ensure every partnership supported sustainable growth."

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Actions Taken:

Over a six-month period, Willingness to Pay implemented a systematic strategy to address these issues:

• Product and Cost Model Review: Conducted a comprehensive mapping of IT and operational costs to catalog offerings. Introduced proxy metrics, and operational scaling factors, to ensure profitability across all client engagements.
• Pricing Architecture Redesign: Transitioned to a multi-faceted pricing model comprising multiple fee types (fixed, fixed metric and variable fees). Developed and deployed a pricing configurator tool underpinned by a robust discounting framework.
• Contract Framework Enhancement: Established a modular Master Services Agreement (MSA) to facilitate seamless updates to pricing and product offerings without necessitating renegotiations.
• Customer Negotiations Support: Focused on expanding recurring revenue streams through fixed fees and mitigating revenue volatility. Provided the global sales team with tools, standard operating procedures, and training to navigate the complexities of the redesigned pricing framework.

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Institutional Commercial Owner, Saxo Bank noted:

We proxy mapped IT and Operational costs to clarify profitability, introduced scalable metrics, and redesigned our pricing model with fixed, fixed metric, and variable fees."

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Results:

The transformation initiative yielded the following outcomes:

Enhanced Revenue Predictability: Increased the proportion of fixed and recurring revenue streams to +35% of total related earnings, thereby diminishing reliance on volatile, transaction-dependent income.

Profitability Transparency: Enhanced cost visibility ensured every partnership delivered measurable profitability, aligned with its scale and revenue goals.

Customer-Centric Pricing Alignment: The redesigned pricing model resonated more effectively with clients’ operational expenditure (OpEx) and capital expenditure (CapEx) budgets, fostering greater satisfaction and adoption rates.

Elevated Sales Professionalism: Empowered the global sales team to engage in sophisticated, SaaS-oriented negotiations through a new advanced CPQ tool used on 100% of all enterprise sales and renewals.

Operational Scalability:  The modular pricing framework provided a foundation for the seamless introduction of future products without disrupting existing contracts.

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As articulated by the Institutional Commercial Owner - Saxo Bank:

We proxy mapped IT and Operational costs to clarify profitability, introduced scalable metrics, and redesigned our pricing model with fixed, fixed metric, and variable fees."

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