Enterprise pricing

Summary

Summarized wtih ChatGPT

Most founders struggle with pricing and often rely on a simple “Contact Sales” button. It’s important to understand your customers' buying habits, conduct pricing discovery, and allow them to figure out their own pricing. Avoid dramatic price increases at renewal to maintain customer trust.

Key Takeaways:

1. Align your pricing model with customer expectations.
2. Use tools like pricing calculators to help customers set their own prices.
3. Be cautious about raising prices significantly during contract renewals.

Highlights from Article

In the early days, try to stick to a pricing model/framework that resembles how your customers are used to buying software.

For flat fee subscription contracts, if your goal is to sign multi-year contracts, give the client 3 options, where they get a higher discount for a longer duration.

What I found was more effective was to let the customer figure out their own pricing so that you don’t have to negotiate. For example, I’d give a spreadsheet with a pricing calculator where prospects could manipulate certain cells based on what they wanted to buy, so they could see how the price would change based on the # of seats or modules they want, the discounts they’d get for longer contracts, and so on. This way, I never felt like I was negotiating against a customer – instead, they were negotiating with themselves.

• Like Never Split the Difference - make sure you aren’t the enemy by letting them calculate prices themselves.

? Try signing them for a 12 mo contract where they can terminate for any reason within the first 2 months, & where they don’t have to pay until day 61.

All material owns to the authors, of course. If I’m highlighting or writing notes on this, I mostly likely recommend reading the original article, of course.

See other recent things I’ve read here.