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Thanks for the reply. Actually, dollar ranges in our space are more in the $5k-20k per seat range. "Bargains" are in the $5k range and "premium" starts at arou
by elblanco 17y ago
Thanks for the reply.
Actually, dollar ranges in our space are more in the $5k-20k per seat range. "Bargains" are in the $5k range and "premium" starts at around $10k per seat (that's for the stand-alone market). It's definitely a high dollar, low volume small market, maybe no more than 20,000 total seats in the entire market space (at the way upper end) in the U.S. and maybe double that globally. For how we are used by our customers, the Office Productivity software space is the closest analogue. But because the market size is so small, lowering our price too much might get us fast market share, but kill us in the long run (plus our sales cycles are hideously long, 6-12 months, and high touch, mostly because of the nature of our customers). We own about 2% of the market right now, which is enough to keep my small shop of about a dozen people fed. We'd like to double our revenue in the next year.
I think that we are certainly starting to hit against the bottom of the barrel in terms of premium standalone customers -- or at least we will maybe in the next year. Most of those I'd say are early adopters who don't mind paying higher dollar for a solution that does what they want. But like any industry, early adopters are a very small part of the pyramid.
What I think is distracting our pricing model is that the enterprise pricing is totally different. The ranges there are $3k-$17k per seat but at seat volumes of 50 or more, but the current industry leader is at the top of that scale while the industry leader for stand-alone sales is in the middle of the range. So we've been targeting that per-seat dollar value and undercutting it as part of our strategy to capture lower volume customers. But like I said, it appears we're starting to run out of room for those customers, we've either captured them, or they went with a cheaper stand-alone competitor.
The book recommendations are great and new to me, I'll definitely look into picking those up.