What's this about then?

[cadbloke]

If you are dealing with larger businesses in B2B leave yourself wiggle room for discounts, they are thoroughly accustomed to getting discounts because they are the Big and Important Unicorn with the Hammer of Thor. This is especially true for volume discounts. Expect them to haggle like they are the only customer who will ever matter to you. 25% is in the ballpark (or even more) to pacify their egos, depending on the size of the favour they believe they are doing you. I strongly believe their purchasing departments believe they will be publicly castrated if they are exposed paying full price. Yes, that was intentionally sexist.

I’d offer them their discount IF they pay their invoice by your deadline which should be a whole lot shorter than 90 excruciating days plus or minus 6 months. If nothing else you get to mess with their heads

[ian]

Yeah, we use Net 30 for all invoices.

They will sometimes ask for discounts. If it’s a procurement group asking for them you can often push back and not give it. If it’s the person selecting the app asking, I’ll sometimes bend depending on circumstances. Though if your tiered pricing already is discounted to larger customers usually you can get by by doing the math on how much they’d already be paying if they were at their size on the base tier.

[infocaptor]

@SteveMcLeod

Here is a real story. Back when we launched our SAAS offering, everything was free with few limitations on number of connections and forms of data uploads. We had number of signups and the daily active usage. Then I introduced stricter controls and noticed that even the active users with very active dashboards decided not to use it any further. These accounts did not convert to paid accounts.

I did not have too much traffic to experiment with so I completely stopped the free pass and made it “Pay before login”. It turned out to be a good decision

For the On-Premise we recently did the opposite. We introduced completely free dashboards. Only time will tell how this goes.

Agree with @ian that small operations cannot command the pricing from the big vendor equivalents. We had to shuffle our pricing so many times to understand the value proposition ourselves. Just couple of years back a customer pointed out that why do we have our pricing same as Tableau. The BI space is extremely crowded and full of noise. Not every vendor has their pricing out in the public. This and other factors made us release absolutely free for all (with some limitations on the audience startups, non-profits and students). I feel good about this decision but it is a new thing so don’t have any figures to backup.

[andrey]

OK. Here you go.

[rfctr]

Your example is the absolute best case scenario, so yes there charge the same or more.

Yes, it is an ideal case, a reference point for me. It won’t be found in real life, I guess, but it helps to build a framework on how to think of prices.

You say the choice is not based on price, why? Because it’s B2B? I’ve sold B2B for 12 years and maybe a handful of times would I say that the customer did not consider price a factor in any way.

I meant that the price is not a factor within a context of #chargeless. I.e. when my price is not 10x less, but 10% less in the price range below 10K. These differences typically do not justify much discussion - the buying budget is bigger than each of the options on the table, and the accompanying costs of implementing the solution are much higher than these 1K of difference. Hence I do not see a direct benefit in dropping prices.

(Again, I speak from my buying experience, not selling, alas)

So you might lose a few points with some customers for being cheaper, but you’ll also certainly win a few points with others.

OK, how is that proves #chargeless is a right approach? It is more like 50/50 then, eh?

Besides, I’ve heard many times - and at least once from your own podcast - that the customers willing to pay more are the best customers, not too demanding, with little to no support. So are you suggesting to charge less and move into the land of worse, more demanding, more support-hungry customers?

Very few people reading my advice have anything close to a strong brand.

Fair point. “Charging above one’s brand” is a skill on par with “Punching above one’s weight” - hard to do, I guess.

Saying “offer the same price” is very easy here but less easy in real life. It means having the exact same pricing model and tiers.

And here we move from the ideal situation of the reference point to the real-life mess…

So, what I’m supposed to do at this point? Just dropping the price? That looks like a knee-jerk reaction to me.

Would there be an option to give each buyer their own tier, maximizing the revenue for you and usefulness for them? Would you normally have information required for that (say their budget?). (I guess that’s what companies with “call us” pricing do…)

Most SaaSs are so cheap to run now though that you can afford to give away the service itself at some level.

Are you ready to share an info how much support costs per customer?

I mean, even when SaaS infrastructure is cheap (but not free), the support still costs something. Those costs have to be collected from the paying customers, right?

But then again - I agree that freemium is a good way to spread awareness and practice your own vendor lock-in. But it is not #chargeless - it is as you said advertising, customer acquisition, whatnot. But until these free users became paying customers, they are irrelevant for price discussion - they are still high in the funnel, and may never drop from its bottom into your bottom line.