Smaller companies without procurement departments are quicker and faster to contract with and they pay on time. Bigger companies with procurement departments request last minute contract redlines and never pay on time (always at least 2 weeks late, as a rule of thumb).
“Contact us” pricing might benefit you if you are smaller. If you’re at a bigger company, the headache of dealing with your procurement department will inevitably (and justifiably) drive up the price - it’s the bureaucracy tax.
Oh man! As consultant I hated that. They would pay 90 days late and just say "sorry, we always pay 90 days after we get the invoice". They know I don't have the resources to sue them, nor would I. And they really had no reason to hold it other than making sure they get the interest instead of me.
Sure maybe it takes a few days to validate the invoice, but 90 days was ridiculous.
Even worse was when I was on the corporate side. I was working with a small vendor and our company had a 90 day wait as policy, but the company refused to deliver the items until they got the money. I really needed the items, so I have to move mountains to get our procurement to cut a check ASAP.
It's absurd, that's why I like working with smaller companies.
It’s a lot of effort to keep going so it may just be more hassle than it’s worth. On the other hand, nothing wrong with that process if you’re within the terms of the contract. When the number gets large enough it will get escalated and, when you show your work, get paid and the payment clerk will get their hand slapped.
They know I don't have a choice to turn down that work just because I don't like the 90 day rule, and they only have that rule so they can keep money in their bank account longer.
And when I was on the corporate side, the vendor specifically would not do the work for me because they didn't agree to the 90 day terms, so I had to fight with my own people to get them paid faster so I could work with them.
It's just a pain all around.
…hell, if I have to speak to a human when I don’t think it’s necessary, then we probably won’t do business.
That's not how I read these at all. "Contact Us" means the company doesn't have set pricing but rather will have a sales person/department that will structure a specific deal and negotiate a contract for your business's specific needs.
If someone refuses to openly list prices they're either:
- Embarrassed by the amount of money they're charging
- Aware they charge more than others and don't want to let you comparison shop easily
- Planning on setting as high as price as possible depending on how much you can be fleeced into payingThere's a large and very lucrative industry around just implementing SaaS software.
If they want to sell their services as custom services, that's the business model - from the beginning they want to make a clear point that this is not a commodity and every deal is a bespoke deal. Even if the technical platform is the same, every business relationship is custom and individually negotiated, with zero expectation that the price you get is in any way related to the prices someone else gets - sometimes that works against you, sometimes that works for you, but that's the business model they've chosen.
The last decade of my career has been multi-million dollar project after project of just setting up and customizing enterprise SaaS software for a customer's specific need.
"how much you can be fleeced into paying" while a proactive way to phrase it, is also "What you are willing to pay." Key words - "you are willing". If it's too high, then it isn't a price, as there is no agreement.
Seller wants highest price, and buyer wants lowest.
When it's a commodity, like apples at the store, with many sellers of a basically undifferentiated product, prices average out to something we think of as "fair." But when a product is unique, or there is a monopoly on it, seller has a huge advantage in pricing.
The difference is that most companies aren't pricing their goods to the maximum amount they think they can get from you personally. They instead price things according to what the majority of their target market is willing to pay.
You can say that ultimately it still comes down to paying only what you're willing to spend, but I might be willing to spend $20 on something, yet also be unwilling to spend $20 on that same thing if I know you've been charging everybody else $12 for that same product. Consumers find personalized dynamic pricing to be unfair and discriminatory and for good reason.
If you're talking to larger companies, thing FAANG, then they have a list price and discount levels that can act as incentives, levers or there are other options for inducement. Otherwise, you give the sales team the authority on go-to-market strategy while they are executing individual deals (tactics). Senior sales leaders can authorize some of those discounts and any special inducements or incentives have to be custom written into contracts by legal + deal desk, making them more time intensive and less desirable.
It seems so sleezy in the way that sales generally gets a bad reputation.
There shouldn't be any problem with having the pricing on the site if it's all above board. That way you're actually reducing the wasted hours of sales people who have to determine if you're even a potential customer.
But many of these products have lots of different modules, and customers don't always know which ones they need. And some nearly require assistance/consulting with deployment, the complexity of which varies depending on environment.
So from the company's point of view, they don't want to put "$200k" on the website if the actual price is between $100k and $1m depending on customer specifics. It will scare off smaller customers and upset bigger customers.
But yeah if it's just one-size-fits-all, download-and-install SW, pricing should be listed.
In the past, I've dealt with a startup that not only did just that, but also used the non-final deal with one very large customer to try and get similar deals started with several other large companies, with half the pitch being just "we're about to deploy our solution at ${very large and well-known international you've heard of}".
This is the way to do enterprise sales.
I understand the insentive is to sell, but there has to be a balancing line between sales and development, both can't work solely independent.
I spoke with a vendor last week who came in at 500k. I told them my budget was 250k, price came back at 255k.
If you only count operational costs and a hypothetical skeleton crew to maintain it it probably costs damn near nothing to add another customer.
But once you include the salaries of 20 to 2000 engineers and the rest of the business to support them it’s a whole different ballgame. A major feature that takes one team 6 weeks to build costs a little less than half a mil in engineer salaries.
Software by its nature is weighted heavily in upfront costs and so pricing is “how little can we afford to charge to be in the black with ARR, how much do our competitors charge, and how much would it cost you to build it yourself.”
I don't understand this viewpoint (which I've seen numerous times). If that's all it is, you can scare those customers away by posting a price, as opposed to having some of them call and hang up on your salesperson when they get a quote.
I take it as a sign that when they do give you a quote, it’s up for negotiation and you should never agree to the first number presented.
But this is nonsensical optimisation imo. At these price points, the ability to negotiate should be evident to anyone who has bought such products before.
Not quite .. their "Enterprise" package only has a "Contact us" option (no pricing details).
I'm working at a VC funded startup and fielding calls with "contact us" pricing, and while I've certainly seen some of those numbers floated, I saw just as many reasonably priced options that wanted to get on a sales call to try and upsell/make the case for going with them.
It's also the case that if something goes wrong the first question is often "do we have a contact at X?" and if you've gone through the "contact us" pricing dance, the answer is probably "yes", or at least "maybe', while if you use self-serve public-pricing plans, the answer is probably "no". Managers like having a named person to bug about problems, so the vendor manager gets to look more competent if they have one, even if the outcome's the same as if they didn't.
Besides, all pricing is "contact us" for enterprises. They don't pay what's on the sticker, even if there is one.
If you pay for a product or service and when something goes wrong your only contact is some jerk in sales that means you fucked up bad. Support options and contacts should have been determined and documented long before you spend a single cent.
SpaceX publicly lists all their prices. If they can list a price tag for a falcon heavy it $97m on their website, these crappy SaaS vendors can list their prices too.
I really wish that were the case. Alas, more and more sellers think it makes them look cool and enterprise-y if they go the "contact us" route. Possibly the most ridiculous I encountered was a browser plugin startup offering that ended up costing something like $2/month/user with a 20 user minimum but even during the demo they were all about "Fortune 500 this and national ISPs that".
As far as actual very large enterprises are concerned (pardon the pun), there might even be some truth to that: I know procurement guys who would only buy if they got the white-glove/wine-and-dine treatment and would have never bought something with a corporate credit card on a website that said "click to buy 35,000 licenses now" (you can do that with Atlassian IIRC).
Fair enough.
But for 99% of companies (i.e. SMB) it's just annoying to the extreme, especially if you have to do this more than once per year because your org is restructuring, your CTO is actually the CFO and reads marketing whitepapers and case studies to follow the latest tech fads, or you're in consulting.
I say, offer both: An SMB plan with listed pricing (segment further at your leisure) and an Enterprise option with "call us". If you don't want SMB business, be honest about it and say "enterprise only, we only do bespoke, don't call if your budget is <50k".
I once had to find software options for a company I worked for. I had a deadline to meet for that, plus my regular duties.
That meant that any company that had "Call for pricing" didn't make the cut. I don't have time for that.
We ended up spending $120,000 on the solution I chose. I don't know if we could have gotten a better deal from another vendor, because they wanted to play games. I don't have time for games.
The company that was honest and up-front about the pricing got the contract, which I know has renewed several times since then.
I have stopped government buying processes (yep, plural) because the price isn't available and they weren't priority enough to spend months on price research. With some companies, it is a larger time waster than the entire documenting the requirements, publishing it, answering questions, and watching the auction.
That’s one way of seeing it which is not necessarily generous.
Another is “You and us both know there is no one size fit all standard solution here so we can’t give you an off the rack price. Call us so we can take your measure and we will start talking about how this bespoke thing might cost.”
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I’m expecting spacex is different because we already know intuitively that launching something is expensive and we know there are only a small number of vendors with which to do so. So space launch companies probably don’t have the same issue…
If that price tag is big enough to "scare away" a customer, then that'll be true with or without the extra contact info collection and sales call(s) and email spam. Like I said: might as well not have the vendor and customer mutually waste each others' time with a bunch of sales ceremony that has no hope of actually producing a sale.
My company has standard pricing for all offerings (including cloud operation and support services) but we have said 'Contact Us' for years. The reason: we have a better chance of closing if we actually interact with prospects. We don't charge more for the privilege.
Just $0.02 from my personal experience.
The problem is that this SaaS business needs to find a pricing model which net's them 1 million per customer. Charging too little means the business will starve, too much means that customers won't sign up. Sales & Contract negotiations can help arrive at the right number. Guessing the pricing model after 1-2 customers can break the business if you don't have infinite VC money.
But yah, they for sure aren't going to be $49 or whatever a month.
The trick is to make the case that the price is cheap for them, given that they get more out of the software than what it costs.
One take-away from this is the old "if you have to ask, you can't afford it", and another is that they're automatically filtering out lower-value or price-sensitive customers.
However, an obvious counterpoint is that Atlassian built a multi-billion-dollar business around up-front pricing, and even seem to still offer that up-front pricing today.
As a general rule, any software which requires "contact us" is going to be somewhere between $50k and $750k, generally annually, (usually for a fully-loaded site license on the high end), but there are definitely exceptions above and below. Certainly there are companies in some industries (WorkDay, Oracle, SalesForce, etc) that are known for being extremely expensive, and there are certainly many companies that would like to get into an upper tier but just aren't quite there yet, and smaller startups (esp non-VC funded) are often on the low end.