How do you best determine SaaS pricing for various market verticals?

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JASON LEMKIN

Ultimately, if you are selling into the enterprise … you need to look at comps.  2 types of comps.

First, are direct comps.  How much are your competitors selling for?  Are you more valuable?  Can you claim you are?  If so, charge 1.5-5x what they charge.  Are you less valuable?  You may need to come in lower.

Second are adjacent comps.  For example, many Workday deals are priced at 50-100% of what the same company pays for Salesforce.  How important is your app to an org — and thus, where does that slot in compared to what they pay for similarly valuable apps, even if they do very different things?  This is the ultimately answer in many cases.

Big Cos. budget, true Enterprise budgets, for apps that are important are based on (x) what they’ve paid in the past, (y) what they pay for other stuff in the budget, and (z) sometimes, but not always, sort of, competition.

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Published on September 17, 2015
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