Comment by freedomben
1 day ago
I'm a CTO who makes purchasing decisions. There are numerous products I likely would have purchased, but I either find a substitute or just go without because I won't play the stupid "let's get on a call" game.
If your website doesn't give me enough information to:
1. Know enough about your product to know that it will (generally speaking) meet my needs/requirements.
2. Know that the pricing is within the ballpark of reasonable given what your product does.
Then I will move on (unless I'm really desparate, which I assure you is rarely the case). I've rolled-my-own solution more than once as well when there were no other good competitors.
That's not to say that calls never work or don't have a place, because they definitely do. The key to using the call successfully (with me at least) is to use the call to get into true details about my needs, after I know that you're at least in the ballpark. Additionally, the call should be done efficiently. We don't need a 15 minute introduction and overview about you. We don't need a bunch of small talk about weather or sports. 2 minutes of that is ok, or when waiting for additional people to join the call, but beyond that I have things to do.
I know what my needs are. I understand you need some context on my company and needs in order to push useful information forward, and I also understand that many potential customers will not take the lead in asking questions and providing that context, but the sooner you take the temperature and adjust, the better. Also, you can get pretty far as a salesperson if you just spend 5 minutes looking at our website before the call! Then you don't have to ask basic questions about what we do. If you're willing to invest in the time to get on a call, then it's worth a few minutes of time before-hand to look at our website.
Oh I might add another huge thing: Have a way to justify/explain your pricing and how you came to that number. When you have to "learn about my company" in order to give me pricing info, I know you're just making the price up based on what you think I can pay. That's going to backfire on you because after you send me pricing, I'm going to ask you how you arrived at those numbers. Is it by vCPU? by vRAM? by number of instances? by number of API calls per month? by number of employees? by number of "seats"? If you don't have some objective way of determining the price you want to charge me, you're going to feel really stupid and embarrassed when I drill into the details.
>you're just making the price up based on what you think I can pay
It should be based on the email address used. If, for example, your email ends in @google.com, you get charged more. If it ends in @aol.com, then they take pity on you and you get a discount.
My co-worker's grandfather owned a TV repair business. The price was entirely based on the appearance of the person and had nothing to do with the actual problem. This way rich people subsidize the repairs of poor people.
More like the people who appear rich subsidize the repairs of the people who appear poor. Probably usually fairly accurate but it's amusing to think about the edge cases where the truly rich don't feel the need to dress wealthy anymore and get their TV repaired for cheap.
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Correct. Market value is not the cost of making X plus a margin. Many people get that wrong.
Marker value is what someone else is willing to pay.
If I remember correctly, Amtrak does something like this for pricing their train tickets. It is not the cost of going from A to B. It is priced so the more populated area travelers, North East Coast, pay higher to help reduce the cost for those in the middle of the USA. This helps make tickets more adorable for the more poor individuals.
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> This way rich people subsidize the repairs of poor people.
tbh I have no problem with this as long as the work was done well.
I've always wondered about this. My wife always tells me to close the garage when folks come to the house to give us bids on jobs so they don't see the cars. Not that a Tesla indicates wealth but I guess it indicates something? I tell her she's paranoid... maybe she's not.
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>just making the price up based on what you think I can pay
It's called supply and demand, and it's the way things have been priced since the dawn of commerce. The only time the price is based on cost is when the market is competitive enough to drive that price down, and the cost acts as the floor. Even then, if you can get your costs below those of your competitors then it's your competitors cost that can act as the floor.
The way things should be priced is based on the value it gives you. If your service makes me or saves me $100 of value per month, I should be prepared to pay up to a little below $100 for it.
No it's not called supply and demand, it's called price discrimination. The way things should be priced is based on the value it gives the market as a whole. Anything further is an anti-competitive attempt to vacuum up more of the buyer surplus.
> It's called supply and demand
Supply of the kinds of services under discussion here is rarely limited in any practical sense, so scarcity does not play.
> The way things should be priced is based on the value it gives you. If your service makes me or saves me $100 of value per month, I should be prepared to pay up to a little below $100 for it.
This ignores opportunity cost. Very few buyers have infinite cash, they do tend to have infinite ways they could spend money though and many of them will give a far better return than a couple of percent.
In reality if you're adjusting your pricing to try and extract the most you think you can get away with from the customer, you will lose a substantial number of buyers - and probably more so with buyers who have a technical mindset.
And also, the customer has the money and gets to make a choice. Sure, supply and demand is a real thing. But there is also a notion of friction blocking the sale. Everyone absolutely hates considering a new purchase that doesn't give you clarity on details and price.
So that CTO says I'm probably not going to bother with you if you don't have a clear price. I also practice this purchasing way. Everyone should. So sure, someone in sales will fight to the death to justify their strategy of obfuscation and charging what the market will bear, and to try to justify their presence in the sales process with some kind of commission and argument about how they caused pain for the buyers and got more money. Meanwhile, company B sold me a widget for whatever, I already paid them, there was no salesperson wasting time on either side.
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What you're saying is akin to someone entering a clothes shop and the store clerk asking what they work on, to gauge the T-shirt prices according to the client's salary.
You know it might be also priced on “this guy feels like a pain to work with after the way he asks questions, let’s put the price up”. There is no way to objectively explain that without having person offended - so I am going to put a price I think will cover me dealing with BS questions or attitude of the customer and if he walks it is still a good deal for me.
We might think that companies need every single sale - well no sometimes you want to fire a customer or not take one on.
You don't have to change you process, so you can still explain it rationally.
Just leave off the "then I multiplied by 10" part.
Which I did by accident once ( not by 10, but it was still substantial )... but it turned out the customer was delighted because we were still 50% vs their existing vendor.
Enterprise pricing is a farce.
I very much agree with the poster above about vendors disqualifying themselves.. another red flag for me is the Two Suits and Skirt pre-sales Hydra Monster that big vendors love to send around, to scare you into letting them capture all the value that their purporting to provide you.
And yes, the above shows I've been both sides of the fence. I felt it was going to be good experience, and it was, but I have regrets too.
I'm confused by this, why would sales team know in detail the vRAM contribution to sales price, and how is it relevant to your purchase decision? I've never heard of enterprise/SAAS pricing to be based primarily using cost plus pricing.
Some products (especially infrastructure) still bill based on (outdated and often irrelevant) core counts and memory count. A few years ago I talked to a seller of a PDF library/toolkit who wanted to know my production and staging core count before they would quote me a price. Explaining to them that it runs in a serverless function on-demand was fun, especially because they would say things like, "well, what's your average?" I would often reply and say my average is defined by a function where you take the number of active users (which itself is highly elastic) and calculate for average runtime at 4 cores per user for approximately 50 ms per page (which page count is highly elastic too) and sum to get "average core use per month". Needless to say it was like pushing a rope.
More common now with SaaS seems to be employee count or some other poor proxy measurement for usage. I love actual usage based billing, but some of the proxies people pick are ridiculous. Like, if I have 5 seats or 500 employees, but 2 users spend 6 hours a day in the software and then 10 others maybe look at it once a quarter, paying the same for those is absurd and is not usage-based billing at all.
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Isn't that exactly how a lot of things are priced? Ie. Snowflake. Pay for compute, pay for storage, etc.
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I've always agreed with this take but now as a B2B founder doing sales, I think it can honestly be interpreted a lot more charitably.
I get on an initial discovery call to learn a few things, like:
* How much will it cost us to support you based on what you're using our platform for?
* How expensive is this problem for you today?
* From there, how much money could we save you?
My goal is to ensure a (very) positive ROI for the lead, and that we can service them profitably. That's how I put pricing together. It seems pretty reasonable.
Our platform is also rather extensible, and I want to make sure that they'll understand how to use it and what it's for, instead of becoming an unhappy customer or wasting their own time.
>When you have to "learn about my company" in order to give me pricing info, I know you're just making the price up based on what you think I can pay.
That is how 99% of sellers do business. The upper end of the price range is what the buyer can pay, the lower end is what their competitors are asking for. Some sellers are lucky to have few competitors, so they can waste more of the buyers' time trying to narrow down exactly how much they can or are willing to pay.
Which is why you shouldn't engage with those sellers and companies they represent unless you have no alternative and are truly desperate.
This is how a lot of consumer businesses are pricing now.
Then they use the same consulting firm as their competitors to set prices.
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So the college model.
The price is set by the market. It never was and never will relate to the seats/resources used/etc.
The price is set by the market as a function of some sellers charging by seats, others by resources used, etc, and some buyers preferring simple pricing models, others preferring usage-based, etc.
is that how you present the price to your own customers? or do you operate on value based pricing?
For #2, someone once said there are two pricing models (was it Joel Spolsky? Don't recall..):
$0 - $999 - direct sale/download, pricing on website
$50,000+ - full sales team, no pricing on website
And essentially not much in between... this has perhaps changed a bit with SaaS, but this is still semi true.
Oh yes it was Joel Spolsky: https://www.joelonsoftware.com/2005/11/18/price-as-signal/
I think you mean this link: https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-...
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That's like a restaurant, with no prices on the menu.
"If you have to ask..."
I would definitely like to never have to talk to another "people person," and no-calls-but-we'll-give-you-the-info-you-need policy sounds great.
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Agreed. As someone in a place to make purchasing decisions, if I can just sign up and try something without having to "jump on a call" and sit through a demo, I'm more likely to do so. I'm more willing to meet afterwards if I like what I see.
As it happens, a while back I did exactly this for a company after reading a post about their launch on HN. In a later conversation with their CEO, I found out we were their first customer!
You can go to the SpaceX website and see the price of rockets. You can literally enter your credit card numbers to pay for it.
I'd wait to see if they have a good black friday sale.
you mean... the gift shop with the model rockets?
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At the beginning of this year i had some reflection on projects at two clients. While the businesses of both clients is vastly different, they were kinda using the same setup: One business critical system. The rest was mostly standard stuff and both companies are about the same size.
Client 1 contacted us by phone they needed to upgrade their IT. The appointed account manager and project leader had no clue of the clients business. The approval of the project took about two months. Engineering was involed after the approval. The project took more than a year, mostly because of communication chaos on both sides. Everybody was annoyed.
Client 2 contacted us by email they needed to upgrade their IT. The appointed account manager emailed engineering. After some emailing back and forth for a couple of days, both parties agreed on the project details. The approval of the project took about fifteen minutes. The project took about a month. We got cake.
It's simpler to forward an email to the relevant people and agree on goals, than to forward a phone call :-)
My least favorite is when I relent and get on their call, and after 30 minutes of answering their questions, they say "OK, next step is we'll schedule another call with our product specialist, because i'm just a sales guy and i didn't really understand most of that."
The worst part is that the sales person has to go back and pitch their team on whether it’s worth their time to get back to you.
This sort of cuts both ways, I’m on the small business selling side.
Sometimes somebody will want a call, I’ll do my dance, tell them the price, then they try to nickel and dime to get a lower price - which isn’t on offer. That blows a lot of my time.
On the other hand, the software I sell solves some novel problems at scale and is designed to be extensible - so in cases where somebody wants to build on the foundation I’ve built I really do need a call to figure out if there’s a missing feature or similar I’d need to build out, or if there’s some implementation detail that’s highly specialized to a given situation.
By and large my evolving strategy is to not have a fixed price listed online, and to reply to emails promptly with pricing with offer to have a call for complex situations.
As someone else posted, SpaceX lists their prices to launch things into space. Your software situations are more complex?
That doesn’t seem like a logical inference to me.
A house construction contractor doesn't have a price list for the sake of obscuring prices, nor because house construction is more complex than space flight.
It's because houses are custom and thus prices are too variable to list in any meaningful way.
For a SaaS product with significant custom integration work, it seems reasonable that prices might also vary in the same way.
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There are many companies that charge “x” per weight of “y” to go from “a” to “b”. How they get “y” from “a” to “b” is complex, but the actual pricing is quite simple compared to bespoke business solutions. It’s just freight.
> SpaceX can provide unique interfaces for Payloads with mechanical interfaces other than 8", 15", or 24". The Sales team will contact you with pricing if you select this optional service.
I'm 100% agreement, right down to the CTO/CIO role. I just don't do business with them, period. I have a strict rule not to do business with people how cold call/cold email, hide info, and force pointless meetings. Once salesmen realize that I'm actually a very low maintenance customer who just knows what they want, they love me, I'm free commission to them because they never have to expend energy on me.
Going to add the most important thing: It is perfectly fine to end calls early if it feels like it has phased itself out. Don't be afraid to do so! Everyone on the call is costing someone else a lot of income. This goes for internal or external calls.
Yes, seriously. When a sales call is scheduled 30 minutes but 5 minutes in we have a conclusion, you get a lot of good will points from me if you thank me for my time, ask me if there's any other questions I have, and then conclude the call. You can even make this explicit with a quip like, "I'll give everybody 20 minutes back!" then it's clear you are being courteous with our time.
Some people dont know when to end calls early and everyone else is too polite to tell them to end it. I had a manager who made it a point to suggest to end a call early. I try not to force calls to end early unless I know everyone on the call. I notice when its all devs its really easy to suggest ending early vs when non devs are on a call unless a dev manager does it.
We sell a devtool (FusionAuth, an authentication server).
We have clearish pricing on our website (the options are a bit confusing because you can self-host or pay for hosting), but we do have our enterprise pricing available for someone, and you can buy it with a credit card.
In my four years there, we've had exactly one purchase of enterprise via the website. But every enterprise deal that I'm aware of has researched pricing, including using our pricing calculator. Then they want to talk to understand their particular use case, nuances of implementation and/or possible discounts.
Maybe FusionAuth and its ilk are a different level of implementation difficulty than keygen? Maybe our docs aren't as good as they should be (the answer to this is yes, we can definitely improve them)? Maybe keygen will shift as they grow? (I noticed there was mention towards the bottom of the article about a short discovery call.)
All that to say:
* email/async communication is great
* meet your customers where they are
* docs are great and clear messaging pays off
* devtools at a certain price point ($50/month vs $3k/month) deserve different go to market motions
At least you offer a pricing calculator.
When we are doing vendor research, we often dequeue or deprioritize vendors that do not have any kind of pricing available for the tier we require. Generally speaking, we assume things like volume discounts are available. Also, it's good to get a rough idea of what the delta between "Pro" and "Enterprise" happens to be. Not infrequently the reason that delta isn't available is because it's stupid orders of magnitude different.
If we know that up front, we know not to waste our time tire kicking with a demo account.
So, the middle ground you describes would seem, to me, to be the right place to be. Giving your pricing page a cursory glance, I would rank it pretty highly for the kind of "initial investigation" we might do.
I think from an entrepreneur standpoint, if I see a space with vendors with non-transparent pricing, I often think "there's an opportunity there".
> I think from an entrepreneur standpoint, if I see a space with vendors with non-transparent pricing, I often think "there's an opportunity there".
That makes a ton of sense. IMO, it means one of two things:
* prices are so high because of the cost of goods sold or margins that they'll scare off anyone researching and therefore there might be an 80% solution that can be priced transparently and eat the market
* the company is still exploring pricing and doesn't have a firm grasp on COGS; this means there is some kind of blue ocean opportunity
Also, this is very minor but phrases like "get on a call" or worse, references to jumping or hopping, really irritate me. What's wrong with that good old English verb "to have"? Or better yet, call is (believe it or not) a verb! Can I call you? Maybe. Can we hop on a quick call? Absolutely not.
I’ve had too many bad sales experiences to deal with that. The second someone tries to force me into a sales call for a non-customized or self-configurable service or product, I assume they’re just shamelessly setting me up to extract as much money from me as they possibly can. I just can’t assume good faith on the part of a company that only distributes product information through someone making a commission. It feels like they’re inviting me into a mouse trap.
I'm a freelancer and sometimes I have to recommend software or services for my clients.
When I evaluate choices I automatically remove all of those that don't have pricing up front as I have no time nor intention to do this. I don't think any company lost millions on me, but many lost tens of thousands.
API providers are the worst, but I kinda understand them.
When evaluating and making purchasing decisions for my security department, I have the same dislike of this approach. And generally for me it is a red flag.
Not (just) because of price gauging, but also because generally it is indicative of a very young company. In many cases they do not want to give the price because they don't know the price; they're still finding out how much they can charge.
When my team organizes calls or onsite mtgs with vendors, they always tell them to remove the first 10 slides because we are not interested in why security matters, how it changed over the last 20 years and how great the company is.
They repeat this a few times so that it is clear.
Least week I had a meeting which started with the above, I asked if they knew what we asked, they said yes but they this is very important.
So I stayed, and when the ended the 15 slides with the hi
(sorry, somehow the end vanished)
Do when they ended the 15 slides with their history I left the room.
I find out really annoying when a vendor knows better what we need to hear. But not all are like this, some start by saying that the first 10 slides were removed :)
The last sentence got garbled?
I’d extend that to sales calls where they try to get you to bend your requirements to fit the mis-aligned product.
I wanted to hire a personal trainer who just couldnt coordinate a call with me and I asked him to send me the details per mail. They said they dont do emails so didnt choose them as it was to scammy for me
They don't do emails? What are they, illiterate?
Quite possibly.
i think so xD
To add to those two, I need a working demo (in sandbox of course) of the product without which there's no way for me to validate to what extent your product meets my requirements. It doesn't matter how many screenshots, product explainers, videos you might have put up. Nothing comes close to a sandbox. Trial period is also fine.
I’m a CTO as well and never get on these types of calls to get more details and pricing since they can be such a big waste of time. Someone else from our organization will get on the call instead and then give me the pricing details so we can make a decision.
What's the most expensive software you bought?
lol, believe it or not this was an interview question one of my Director of Engineering used to use to sus out the experience of people. As I read the parent comment I was thinking the same thing.
Be careful listening to this kind of advice. You never know what ballpark the "CTO" is playing in.
I'm just thinking about 6 to 7 figures software investment and trying to understand how you could do that without several meetings.
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“Get on a call” is code for “we have commissioned sales people and in order to make that work we can’t let inbound leads from our website bypass them”
Are you me? I'm a CTO too, and I feel _exactly_ like this.
I'm also a CTO frequently making product decisions, and I refer to it as "Boomer pricing." You want to get on a call with me to assess the size of my company and whether or not I have some bureaucratic, unconcerned entity with an indiscriminate pocketbook. Clear pricing up front, and ideally a pricing calculator, or I don't even consider it.
If I make a product, I don't want you to use it because you found me first and I happened to harangue you on a sales call. I want you to find my product, compare it will full transparency to the other products, and go with mine if it best suits you. Anybody who behaves differently I immediately assume to be behaving in bad faith and is not actually confident in their product on its own merits.
> I want you to find my product, compare it will full transparency to the other products, and go with mine if it best suits you. Anybody who behaves differently I immediately assume to be behaving in bad faith and is not actually confident in their product on its own merits.
Totally agree. I think this why I hated the enterprise sales dance so much -- if somebody doesn't want to buy, I don't want to sell; if they don't know what they're buying, they probably aren't the type of customer I'm looking for i.e. likely to become a support burden.
>2. Know that the pricing is within the ballpark of reasonable given what your product does.
My goto line is "I can get a ballpark estimate for chucking 22 metric tons into low earth orbit, why can't I get a ballpark estimate for your boring enterprise software library licensing?" Links to SpaceX pricing help here.
Case in point this dumpster fire of a product: aparavi.com
> There are numerous products I likely would have purchased, but I either find a substitute or just go without because I won't play the stupid "let's get on a call" game.
> I've rolled-my-own solution more than once as well when there were no other good competitors.
I don't want to be rude but this sounds like terrible business decisions. I would say this is a case of cutting your nose off to spite your face but I suspect it's not your money your wasting rolling-your-own solution. Like it normally costs a lot more in dev resources to build instead of buying. And it seems like your doing it because of your ego and your unwillingness to play stupid games.
That's a significant over-simplification and ends up wrong in many cases. Build vs. buy is largely the same equation as rent vs. own in real estate or automobiles. Generally speaking, in the short term renting is almost always cheaper, but there's a break-even point at which buying (aka building) becomes cheaper. Owning the system also grants considerable ability to build it to be exactly what you need, instead of hacking around deficiencies and/or begging your account manager to get your feature approved and implemented.
There are plenty of situations in which the terrible business decision is to rent instead of build. The difficulty is that without knowing the future it's not always clear, so you have to use your best judgment and hope you get it right.
Edit: Also don't forget that roll-your-own doesn't necessarily mean starting something from scratch. In many cases I opted to use and self-host an open source project that sometimes is sufficient all on its own, and when not we can make changes to it. I almost never start a non-trivial project from scratch just to avoid buying, unless it's a major piece of our product or value proposition in which case you have to consider the risk of building on a foundation you don't control.
TLDR; please don't call him, he really doesn't like calls. Must be a gen z
your probably leaving money on the table then
i’d find that unacceptable as a ceo
you got to do the work to do what’s best for the company, not yourself
No, they're protecting money on their company's table from being taken by random sellers. "Let's get on a call" game seldom leads to better deals for the buyer.
I see it like this. If the seller can have salespeople waiting on a call, there can be better deals somewhere else. If the seller can have people cold-calling other companies, there most certainly is a better deal around that they don't want me to know about.
Over the years I have developed a salescall aversion to the grade that I hang up as soon as I my unconciousness have detected one. It has gone so far that I have had to apologize to our salespeople calling me and I just hang up by reflex. Very awkward I tell you.
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CTO's time is worth ~$10k a day, spending a day "on calls" to save $2.50 is unacceptable.
But part of doing what's right is considering opportunity cost.
If buying something would be a win for an org takes up too much organizational bandwidth because of how hard it is to procure, then it's not worth fiddling about trying to buy it.
The org gains a whole bunch of time he's not wasting on useless calls.
when your purchasing 100k+ products having a conversation makes a lot of sense
lots of opportunities to find easy win-win
finding out what the salesmen incentives are and working with them can lead to a good outcome
obviously not worth it for smaller ticket stuff
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