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$1000 is the purchasing limit in most large enterprises - anything over $1000 needs specific authorization. Buying a product at $999 is completely frictionless,

$1000 is the purchasing limit in most large enterprises - anything over $1000 needs specific authorization. Buying a product at $999 is completely frictionless, while buying a product for $1001 involves multiple meetings and reams of paperwork. In enterprise purchasing logic, $999 is indistinguishable from free and $1001 might as well be $50,000. Clever software marketers have realized that a $999/mo SaaS product fits under that limit just as well as a $999 boxed product.

vmarquet 9y ago
This. For more information, see this post https://training.kalzumeus.com/newsletters/archive/enterprise_sales https://training.kalzumeus.com/newsletters/archive/enterpris... by patio11.
- StrangersAdvice 9y ago
  That was an interesting read. Don't know how much of it to believe though.
  - StrangersAdvice 9y ago
    why the down votes?
troydavis 9y ago
At least from having sold to a small subset of them, the “most” in “$1000 is the purchasing limit in most large enterprises” isn’t accurate. Yes, almost every large company has different purchase requisition approval processes based on the amount and often the type of expense, but they vary widely between companies and roles. There’s nothing magical about $1000 vs $500, $250, $0, or $2500. I’m not even sure $1000 is the mode; at least from my small sample, $0 and something larger ($2500 or $5000) are more common. Also, in nearly all cases I’ve seen, large companies determine the approval process for anything with a monthly fee differently (generally using the total 1-year expense). If it ever existed, the “clever exception” is long gone now that companies buy a lot of SaaS. Finally, usually larger enterprises are using SAP, Oacle ERP, Coupa, or a similar “Procure to pay” (yes, that’s what the category calls itself) product, and they have really complex approval rules by ledger category, not just amount. (My own theory is that patio11’s otherwise-good blog post simplified things so far that many readers thought the specific thresholds it gave were a lot more common than they ever were.)
- vram22 9y ago
  What does "Procure to pay" mean?

vmarquet 9y ago

This. For more information, see this post https://training.kalzumeus.com/newsletters/archive/enterprise_sales https://training.kalzumeus.com/newsletters/archive/enterpris... by patio11.

StrangersAdvice 9y ago
That was an interesting read. Don't know how much of it to believe though.
- StrangersAdvice 9y ago
  why the down votes?

troydavis 9y ago

At least from having sold to a small subset of them, the “most” in “$1000 is the purchasing limit in most large enterprises” isn’t accurate. Yes, almost every large company has different purchase requisition approval processes based on the amount and often the type of expense, but they vary widely between companies and roles. There’s nothing magical about $1000 vs $500, $250, $0, or $2500. I’m not even sure $1000 is the mode; at least from my small sample, $0 and something larger ($2500 or $5000) are more common. Also, in nearly all cases I’ve seen, large companies determine the approval process for anything with a monthly fee differently (generally using the total 1-year expense). If it ever existed, the “clever exception” is long gone now that companies buy a lot of SaaS. Finally, usually larger enterprises are using SAP, Oacle ERP, Coupa, or a similar “Procure to pay” (yes, that’s what the category calls itself) product, and they have really complex approval rules by ledger category, not just amount. (My own theory is that patio11’s otherwise-good blog post simplified things so far that many readers thought the specific thresholds it gave were a lot more common than they ever were.)

vram22 9y ago
What does "Procure to pay" mean?