Ask HN: Can I offer different prices to different users for the same product? Do any SaaS companies use "Request Demo" or "Contact Sales" to offer different prices to different customers for the exact same product?
e.g. "If customer is a startup I sell ONE license at $50 but if it's enterprise I'll sell ONE at $5,000 just because I know they can afford it..." |
On the other hand - if you decide to move away from the license model, you can charge according to seats, etc.
One way to do it is have the Enterprise version have a few more features that are unlikely to be of interest to small companies or individuals.
Another is just to say the company size on your pricing page. If your company has 500+ employees it's $5000, if 1 person it's $50, if 2-10, it's $200, if 11-499 it's $1000 - or whatever.
Can also have per user, say $100 per user, but a single location site wide license for $1000, or a global site license covering all branches for $20000.
Or whatever prices you like. Look around and you'll find tons of companies offering each kinds of licensing.
This is a common misconception. The lawyer haggling usually has to do with non-monetary contract terms. Price is usually left to the business folks.
An example (I know multiple companies using this to great effect): allow self-service signups. Starting at $60k/year, the enterprise account includes monitoring of what all users @company.com are getting up to.
I'd be careful about pricing this way to consumers since states are now started to see pricing differences as discrimination. See: http://nymag.com/intelligencer/2018/02/tinder-prices-discrim...
Which is amazing. It's probably a lack of experience in B2B, but I tend to see prices as "take it or leave it", so if I see an absurly high price I go "Aight, that's a no", instead of trying to haggle.
It's just so inefficient having to haggle with every vendor to get real prices for a comparison.
Is the sales process anything else than just a huge money sink?
One time I was buying some software licenses. List price was $30/seat. We needed 2000 seats. Which would list at $60K. By the time it was all said and done I ended up with 3000 seats for $10K.
But realistically there is probably more money made in hiding prices and haggling a lot. Just be aware that the sales cycle will be much longer.
Different feature slabs (basic, advanced, enterprise etc) can be priced differently.
At any given feature slab, usual expectation is that after a certain scale, additional usage will be billed close to cost. The premium you extracted at lower end of the usage slab should cover your R&D costs, other overheads and your profits. If you care to up-sell the higher feature slabs, then you can offer a time-limited discount or trial while making it amply clear that this is a one-time discount etc. to facilitate trial.
Having a cost+ model internally and looking at your customer mix and competition in the market will help you price each feature x usage slab appropriately.
Remember that customers expect prices to always go down over a period of time (due to lowered hardware costs, better automation, depreciated/amortised overheads etc). So, it is better to start high and go low than try to do the other way.
Lots of non-SaaS companies use price discrimination as well. The biggest example is airlines, who will sell the same round-trip for different prices depending on whether or not the stay includes a Saturday night. Airlines assume that price-insensitive business travelers are generally unwilling to spend a Saturday away from home, and charge higher prices accordingly.
Funny thing is when enterprise customers start asking for so many features, you have to tell them "Sure, we can build it, but it'll cost $50k instead of $50", and surprisingly they write you a check, so you start building those features.
And, of course, if the customer finds out that other customers are getting better pricing, expect them to raise hell until they get the same price or better.
First of all, building a company which can effectively sell to (and support) businesses as well as end customers is far from easy. Unless a company has a proven track record, I'd meet such claims with much skepticism.
Enterprise customer's expectations/requirements from a support, integration, availability, etc. perspective are completely different than those from an end-user. When going through those requirements, it comes down to finding the price at which those requirements can or are willing to be met. For example, an enterprise customer is likely to add clauses into the contract which deal with ownership changes, bankruptcy, option to transfer to a perpetual license (possibly with source code) in case of end-of-support, availability of consultancy services for integration to future tools, etc.
When you see a 'contact sales' form it usually means professional sales people. Their job is trying to determine how much you are willing to pay based on how much you'll benefit from the product. But the pricing will not be $50 or $5000. Generally businesses aren't going to send professional sales people chasing a sub $10k deal.
Many SaaS companies don't want to create/maintain a huge professional sales apparatus, and/or they want to focus on getting a toe into places at $10/month/user and gradually growing through the entire company. So instead they try to slice the up the market based on per user costs, or making the specific features that businesses need really expensive. Building a pricing model that scales up quick.
- make sure your unit economics work; you dont lose money on a sale unless its part of some intentional strategy (you need a pile of cash)
- find some artificial scarcity features and at least separate your potential customers using one of these.
- instrument your systems (sales and revenue) so you can get good stats on LTV, LTV:CAC, ARPA, etc.
- after 6 months (or whenever you feel is appropriate) revisit pricing and revise your strategy.
Like many here, as a potential customer, I find this practice frustrating, tho.
https://www.goodreads.com/book/show/70420.The_Undercover_Eco...
Without that, I am not sure how this is sustainable unless you are in the "disposable services" business.
And for Startups, it's not uncommon to give discounts because sometimes you just want the logo.
Not a short or simple read, but wonderfully covers working through all of the mechanics of creating pricing structures.
In both of those cases however it's very easy for the vendor to cover their tracks. I imagine it would behoove you to do the same if you're taking a similar tack.
The venue for the event is a good indicator of how much money the client has.
The musicians themselves charge different prices. They expect to get paid more for a higher budget event.
If client A recommends the band to client B, then B will usually know what A paid. That's OK, because a referral gig is usually easier to book, and worth keeping the spigot flowing by sticking with the same price.