5 ms·

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 futur

by RobinL 2y 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

tashian 2y ago
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.
- earnestinger 2y ago
  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.
- necovek 2y ago
  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...
- TeMPOraL 2y ago
  > 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. -- [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.
wil421 2y ago
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?
- sim7c00 2y ago
  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.
  - wil421 2y ago
    The things I hate about this with SAAS products is they usually gate keep things like sso behind the enterprise plans.
    - physicsguy 2y ago
      From the other side, have you ever tried to deal with corporate customers with SSO? What normally happens: * Enterprise customer's CIO/Legal/Security team demands SSO. * You are put in touch with some support guy in India in IT * He doesn't know so has to go out to some external consultancy to work with whatever hell they've layered on top of Entra ID * You end up getting sent a SAML configuration * Said SAML configuration doesn't work for some reason so you reach out again. * You wait for a response for a month * The people who actually want to use the product are getting annoyed * Somehow an exception is made, so user accounts get created, people start using the product. * 6 months later the exception is up, you've still not heard from their IT team despite badgering them. * Suddenly their IT team gets into gear, it all gets set up and is working. * Two years later, the SAML configuration is due to expire. You reach out to the customer contact and the whole game starts all over again because of course all the people you previously spoke to have left.
srveale 2y ago
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?
- jimbokun 2y ago
  > 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.
  - precommunicator 2y ago
    Nah, what you do is you add this feature for everyone, unless it doesn't make sense
    - jimbokun 2y ago
      > for everyone YES! Adding features just for single customers doesn't scale, adding features useful to many customers does.
    - srveale 2y ago
      This is what I meant in my comment. The seller needs to know what the buyer wants, maybe its a big bulk discount or an extra feature. If the seller decides the discount is too steep, or the extra feature doesn't fit with the road map, then no deal. Or maybe the deal really is that big, and it's worth catering to some one-off demands. None of this means "hiding" information, but you can't put something like "We'll do X hrs of extra work if you buy Y licenses". Just like the any store might have a 10% discount if you buy a dozen, but if you want 50,000 then there will probably be a conversation involved.
StableAlkyne 2y ago
> 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".
mbesto 2y ago
> 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.
- TeMPOraL 2y ago
  > 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.
  - BeetleB 2y ago
    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.
    - TeMPOraL 2y ago
      Right. The scenario you describe is reasonable. But as a buyer, if you put out those few pricing options, even if none of them match all my needs, I get to see both the features you offer and the prices you ask, which gives me the two critical pieces of information I seek: whether you have the capability to satisfy some or all my needs, and what order of magnitude we talk about in terms of costs. If that information tells me that you might have something for us, and it might fit in our budget, then I'll be more than happy to call you, and spend whatever time is needed to agree on a set of features and a price that works for both of us. The thing I want to desperately avoid is wasting time dancing around the salesmen trying to overhype their product while staying vague on the details, in hopes to get me to buy (and pay as much as I can) regardless of whether I get any value from it.
zmmmmm 2y ago
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.

by RobinL 2y ago

tashian 2y ago

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.

earnestinger 2y ago
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.
necovek 2y ago
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...
TeMPOraL 2y ago
> 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. -- [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.

wil421 2y ago

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?

sim7c00 2y ago
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.
- wil421 2y ago
  The things I hate about this with SAAS products is they usually gate keep things like sso behind the enterprise plans.
  - physicsguy 2y ago
    From the other side, have you ever tried to deal with corporate customers with SSO? What normally happens: * Enterprise customer's CIO/Legal/Security team demands SSO. * You are put in touch with some support guy in India in IT * He doesn't know so has to go out to some external consultancy to work with whatever hell they've layered on top of Entra ID * You end up getting sent a SAML configuration * Said SAML configuration doesn't work for some reason so you reach out again. * You wait for a response for a month * The people who actually want to use the product are getting annoyed * Somehow an exception is made, so user accounts get created, people start using the product. * 6 months later the exception is up, you've still not heard from their IT team despite badgering them. * Suddenly their IT team gets into gear, it all gets set up and is working. * Two years later, the SAML configuration is due to expire. You reach out to the customer contact and the whole game starts all over again because of course all the people you previously spoke to have left.

srveale 2y ago

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?

jimbokun 2y ago
> 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.
- precommunicator 2y ago
  Nah, what you do is you add this feature for everyone, unless it doesn't make sense
  - jimbokun 2y ago
    > for everyone YES! Adding features just for single customers doesn't scale, adding features useful to many customers does.
  - srveale 2y ago
    This is what I meant in my comment. The seller needs to know what the buyer wants, maybe its a big bulk discount or an extra feature. If the seller decides the discount is too steep, or the extra feature doesn't fit with the road map, then no deal. Or maybe the deal really is that big, and it's worth catering to some one-off demands. None of this means "hiding" information, but you can't put something like "We'll do X hrs of extra work if you buy Y licenses". Just like the any store might have a 10% discount if you buy a dozen, but if you want 50,000 then there will probably be a conversation involved.

StableAlkyne 2y ago

> 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".

mbesto 2y ago

> 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.

TeMPOraL 2y ago
> 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.
- BeetleB 2y ago
  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.
  - TeMPOraL 2y ago
    Right. The scenario you describe is reasonable. But as a buyer, if you put out those few pricing options, even if none of them match all my needs, I get to see both the features you offer and the prices you ask, which gives me the two critical pieces of information I seek: whether you have the capability to satisfy some or all my needs, and what order of magnitude we talk about in terms of costs. If that information tells me that you might have something for us, and it might fit in our budget, then I'll be more than happy to call you, and spend whatever time is needed to agree on a set of features and a price that works for both of us. The thing I want to desperately avoid is wasting time dancing around the salesmen trying to overhype their product while staying vague on the details, in hopes to get me to buy (and pay as much as I can) regardless of whether I get any value from it.

zmmmmm 2y ago

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.