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PricingSaaS

603 members • Free

21 contributions to PricingSaaS
Two or more pricing models
Currently, have a user based pricing model for our B2B SaaS. An association with several Micro business members prefers a business or location based fixed pricing. Should we agree for location based pricing for micro business owners ? Our mid sized businesses prefer a user based pricing. Should we support both pricing models and give a choice to customers? What other points should we consider while making our decision?
2 likes • Jan 31
You need to think about the commercial debt you are building and whether the additional revenue is justifying this. different price model => requiring different measurement (location instead of users) => requiring exception process or technical capabilities to enable automated measurement => feeding different invoicing => require different strategies for price adjustments.... In short: Be mindful of the recurring impact/cost of adding another pricing model. Two considerations: 1. If the deal is crucial for the development of the company, all the overhead might be well invested. 2. Depending on the business model, you might want to assess why mid-sized clients prefer user-based instead of location-based. Along which dimension does the value for the client scale? Location or user? Might be that you leave money on the table.
How to aproach larger companies that will only work with you if you sell them the platform
Thanks for accepting me in your community. I have spent two months reading The Pricing Roadmap book and watching Ulrik´s videos to improve my company aproach on pricing. We have a lot to work and learn and is super exciting to carry on this project. I have, however a much pressing question. We provide a monitoring and control saas service for mining, water utilities and energy companies and we also install and mantain our monitoring instruments. We deal with much bigger than us, cupper mining companies and pulp companies, among others. They frequently pick their suppliers on biddings and lately some of the biddings require we sell the platform to them because they want complete control on their data. Related to this, some big energy intensive companys have told us, no, we cannot work with you because all our data must remain within the house for security resons. So, I was thinking.. A "job to be done" would be ...I want others to develop my platform but I want to run it withouth the data going out. If we develop, and deliver an entire platform for each of this requests. How are we suposse to charge? and more important.. should we do it? Could we answer in other way with out losing this opportunities? If you could guide me in this, I would really aprecciate it. Kind Regards and excuse grammar english mistakes.
4 likes • Oct '24
Hi Nicole, welcome to the community! I think your problem is not a pricing but a product management problem. If you sell your product, you are no longer in a SaaS business model but in the SW business model. This will impact your operating model significantly and will create significant cost. Examples for such cost drivers are different support and maintenance flows, upgrades need to be coordinated and agreed,, ... Two brief reflections - Based on experience, the price difference between a SaaS offer and the same tech stack being deployed to a client ranges between a factor of 3 and 5. - My view: Even if you use the same tech stack, make sure to put both operating models into two separate units. Will also help to manage cognitive load for your delivery (professional services, support, ops) staff. All in all, it is doable to accommodate such deviating requirements, but be mindful of the challenges it comes with!
1 like • Jan 13
@Shawn Swanson , I agree to your statement - with the caveat that the company has a general openness to cloud. I faced (too many) legacy clients who were not willing to sign a cloud app regardless of whether DPA, SOC2 or similar were presented. Generally speaking: If you want to sell a cloud-native app into the B2B market, you need to have DPA and SOC2.
How to effectively expire discounts at renewal
Hey folks, Our B2B sales led SaaS business is currently exploring some changes to how we communicate pricing to customers in our Order Form. One of our goals is to get better at expiring / removing discounts at renewal in order or improve our expansion ARR and therefore improve our NDR. Today, we don't show any discounts on the Order Form. We're aligned internally that we want to start showing discounts so our customers clearly see that they are getting a discount and our reps at renewal have a number to point to when they discuss reducing or removing that discount. One item I'm looking into is how to clearly communicate to customers that the discount will expire after the initial term. I looked at a handful of Order Forms for vendors we buy from (Slack, Zoom, Salesforce, HubSpot, etc.) and it was rare to see any mention in these regarding the treatment of discounts. Does anyone have experience explicitly writing into the contract how discounts will be treated in future terms? One of our concerns is being explicit with this will prolong negotiations. Thanks for any advice! Best, Steve
2 likes • Jan 13
I was responsible for a product that was sold with a multi-year (mostly 3y) initial term and we spelled out any deviation to the standard terms in the order form. Due to various dependencies internally, we had decided to sync the terms with calendar years and when giving discounts we explicitly spelled out the discount linked to the calendar year to avoid any misunderstanding. Acknowledging that this is a special situation, this worked well for us.
Saas or not saas ? That is the question
Thank you for the insightful content! I have a critical business dilemma and would greatly value your perspective: One of my few but important SaaS clients insists on owning the code and solution to eliminate competition. I see three options: 1) Refuse and stick to the SaaS model with other clients, risking losing this key client. 2) Agree to share some intellectual property to protect her while maintaining my ability to serve others. 3) Sell my company to her. Could you help me clarify the best path forward for my company’s future? Thank you so much!
0 likes • Nov '24
@Max Unger, pinged you on Linkedin
0 likes • Nov '24
@Max Unger, you should read this post from Ulrik on Linkedin: https://www.linkedin.com/posts/ulriklehrskovschmidt_predatory-customers-in-saas-my-list-of-activity-7267054610631028736-puwY?utm_source=share&utm_medium=member_ios
Target Discounts
Hey folks. Context: I'm working on introducing better pricing guidance for our B2B SaaS product that's sold using a sales led motion. Today we just have list prices and we want to introduce target prices. We've never published our list prices nor put them on customers' agreements so we have some flexibility with changing these to fit our needs. We do want to move to showing customers the list price, discount, and net pricing on agreements. This will help us more effectively expire discounts that are intended to be short term (e.g. 1st year). Question: When you're thinking how to set list vs. target price (target discounts), what have you seen work well? Hypothesis: My initial thought is to set the target price 10% - 20% below the list price. Here's my rationale: 1. If sales starts the negotiation at list, it gives them some room to negotiate down to target 2. If we want to setup most of those discounts as 1st year only discounts, then the price jump for customers isn't painfully large 3. Our discount escalation policy is setup so AEs can discount 10%, Sales Directors (20%), RVPs (30%), etc. Targeting a discount of 10% to 20% should keep most deals from reaching the more senior approval levels. Would love to hear some thoughts on the topic if anyone has any. Thanks in advance! Steve
0 likes • Nov '24
Hi Steven, let me share some assorted thoughts. - Limiting discounts to year 1 (or at least make them time-limited) is the right way! - While I can relate to your thinking of providing your commercial org with "wiggle room", it also risks creating an expectation with clients to get the same discounts when they purchase another product of yours. I observed many times that this led to sales teams questioning the value of the product and resulted in them easily giving away margin. - To counter the above, #1 incentives for the commercial org need to be structured in a way that non-discounted deals produce a significantly higher quota retirement/bonus. #2 continues education/training/coaching of the sales teams helped getting sales reps out of the rabbit hole of prematurely discussing discounts with a prospect. - Obviously, the discount level need be closely linked to the margin management of the firm. I have met many delivery teams having to discuss their operational margins because services had been sold below the design margin. Considering this early on avoids many operational escalations. Hope that gives some perspectives. kr, Carsten
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Carsten Kunkel
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32points to level up
@carsten-kunkel-2866
Being through an evolution from presales, service delivery and product mgmt in SW and SaaS products for financial services over the past 2 decades.

Active 208d ago
Joined Aug 21, 2024
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