Comment by RobinL
1 day ago
Schedule a call is a huge red flag to me because:
- it implies differential pricing, meaning they will charge you as much as possible both now and in the future (when you may be locked in)
- it usually obscures what the product actually does
Differential pricing is really pernicious because if the product happens to be super valuable to you, they're likely to find out and charge you even more
> it implies differential pricing
Worse than that, calls aren't usually tracked. They will forget they told you "oh we won't increase the price next year," but they'll damn well remember the green engineer you invited to sit the call who blurted out that the $75k/yr license fee was "within budget".
What if you sell a product where it's easy to determine the cost for one user signing up by themselves, so you figure out the required markup and publish that on your site. But large organizations wanting licenses for each user will want a discount, will want finer details about contracts, and often some kind of unique adaptations to the product for their use case. The selling company needs to know if its worth the effort, in which case you have requirements gathering and negotiations. Of course there will be differential pricing depending on what the buyer company wants (cost goes up) and if it's a whale of a deal that the seller really wants (cost goes down) So... schedule a call?
> you sell a product where it's easy to determine the cost for one user signing up by themselves, so you figure out the required markup and publish that on your site.
Then someone at a large organization can multiply this number by the expected number of licenses they'll need, and get a ballpark estimate for the (upper bound of the) costs of the service, which is a critical input in determining whether it's even worthwhile to consider talking to the vendor. Having that information, the organization can then schedule a call to negotiate whatever extra adaptations and discounts they need, or realize signing up is unlikely to have positive ROI and skip it, which also saves the seller from wasting their time on a deal that won't come through.
Vendors that hide critical information and pricing behind a phone call are eating the risk of having their time wasted on negotiating deals that would never succeed, trading it for a chance to scam some clueless or loss-insensitive companies for some big money.
> Vendors that hide critical information and pricing behind a phone call are eating the risk of having their time wasted on negotiating deals that would never succeed, trading it for a chance to scam some clueless or loss-insensitive companies for some big money.
That or they have "customers" who are knowingly or unknowingly incentivized to have the vendor succeed.
People in marketing, often even those in higher levels, know Google analytics. They have demonstrated experience with it. They want to keep using it. They want their employees to keep using it. Google Analytics plus or whatever it is called iirc does not have a pricing page publicly available.
Why does Google not have pricing available publicly? Why do customers put up with Google? Is there any other reason?
PS for those curious, I think this is one of the limitations we hit with Google Analytics free
> Custom dimensions: 20 custom dimensions
> The selling company needs to know if its worth the effort
It's not worth the effort.
It's killing your ability to scale your sales process. Unique adaptations kill your ability to scale product development, as now you have a bunch of one off deployments. Figure out ahead of time what discounts you want for various tiers of user count.
If you are a startup, avoiding things that don't let you scale are critical.
Nah, what you do is you add this feature for everyone, unless it doesn't make sense
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I believe this is one of the main reasons cloudflare focused so much on Workers: it allowed them to replace much of the one-off features they had to develop for various customers
Have you ever done enterprise contracts? A lot of huge companies won’t touch smaller products because they can’t guarantee what they want. These are complex negotiations with a lot of a la cart options.
What kind of products are you buying where you don’t know what they do?
you are right. an enterprise products can never be ready for any enterprise customer. they need custom solutions to work with what they already invested millions in. each customer is different there. most enterprise products are ever expanding 'app platforms' or frameworks ultimately, in order to be able to adapt to new customer environments and needs quickly and efficiently. if they arent, most environments will spit them out quickly and harshly. bad for business on either side.
The things I hate about this with SAAS products is they usually gate keep things like sso behind the enterprise plans.
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> quickly and efficiently
Are we considering products like Salesforce or SAP "enterprise app platforms" here?
Look for any of a million news reports on multi-year "integrations" (sometimes even failed ones but always over budget).
Totally OT, but I love your typo "a la cart". It makes me think of an early 20th century greengrocer with a cart of vegetables and fruit trying to appear more sophisticated by saying he's selling things "a la cart".
Doh! Siri isn’t the best for commenting.
Enterprise sales wishes they could have customer fill up carts.
How should a company figure out what to charge for something in the first place? Especially a startup that doesn't have much market data to go on, and may be making something entirely new that no one quite knows the value of. When this is the case, one option is to do price discovery. And the way to do that is to remove prices from the website, take calls, learn about customers and their needs, and experiment.
> and may be making something entirely new that no one quite knows the value of.
How many such companies even exist at any given point in time? In software in particular, that's going to be almost none, and those few that are, won't be that for long. For everyone else, there are already competitors doing the same thing, and even more competitors solving the same problem in a different way[0], giving you data points for roughly what prices make sense. Between that and your costs being the lower bound, you almost certainly have something to work with.
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[0] - There's no "someone has to be the first" bootstrap paradox here. Even if you're lucky enough to genuinely be the first to market with something substantially new, it still is just an increment on some existing solution, and solves a variant of some existing problem, so there is data to go on.
When you don't how valuable it's going to be, you at least know how expensive is it to make.
For a company wanting to make a profit, you need to cover your costs, so that's a minimum, with some reasonable profit on top.
If you can't figure that out either, well...
If client pays for a link that’s part of a chain, and doesn’t want the chain broken, and still has profit, it means client can pay more, that link is worth more.
> Differential pricing is really pernicious because if the product happens to be super valuable to you, they're likely to find out and charge you even more
A super valuable solution to your problem is pernicious because...checks notes...a provider is trying to align their pricing with the value it creates with solving your problem.
I can't scratch my head hard enough.
> a provider is trying to align their pricing with the value it creates with solving your problem.
That's just an euphemism for "a provider is trying to capture for themselves all the value their product creates for you".
A real head scratcher. Perhaps has something to do with there being no point of buying if all (or even most) of the value flows back to the seller? Unless you're a nail wholesaler and are happy with 0.1% margins because you sell by truckloads anyway.
No, I get the purpose of his comment. For a complex product and large customers, it's rare that you can guess what is useful to the company and price it appropriately. The product may offer 20 features, of which 5 are useful to the customer. Your (few) pricing options may be insufficient. You may have a pricing that offers only 3 of the features they need. They're not going to buy it. Your next tier may offer 10 options. It has all 5 of what they need, but too much more, so it's priced too high.
Even worse, your tier may have 10 options but still not capture the 5 they need.
So you negotiate, and they provide you the 5 you need at a reasonable price.
This is standard.
Oh, and negotiating a trial period is almost always a must. Perhaps a 2 week free trial is not enough for the customer. If you could bump it to 4 weeks, it could lead to a lucrative sale.
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> "a provider is trying to capture for themselves all the value their product creates for you".
And what precisely is the problem? Obviously, we have incomplete information, but in efficient markets ALL providers all trying to capture the full value of the solution they provide. With infinite time, markets essentially adjust themselves towards this goal. As long as that number is 99.99% (meaning the buyer creates an additional 0.01% of economical value) it's still valuable for BOTH parties.
FWIW most SaaS businesses severely underprice their offering relative to the economic value they create.
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the obscuring is just as bad as the differential pricing
9 times out of 10 even when you get on a call with them they just tell you the product does everything but their "consulting" or "support" will work to "configure" the product for you to do it. Meaning, it doesn't do that and they are going to sell you high priced consulting to ram their square peg into your round hole until you either beg them to stop or become stockholmed and invested enough that you are persuading your own stakeholders that it really does what it was supposed to.