The last 25 years have seen massive changes in our access to information, and how we get to that information. Can you remember the last time you had to look something up in a dictionary or encyclopedia? Maybe, or maybe not if you’re young enough and never had to resort to physical books as resources.
This transformation affected every nook and cranny of our world, including the realm of software pricing information. Back when everything was on-premise, software providers were able to store pricing data privately and only share it in relevant situations.
And pricing was more complex, as everything was based on what kind of load a business’s on-site servers could handle. Part of that sales and pricing process was finding out how many servers a business had, how many end users would be “dialing in” (gulp), and other now-outdated factors.
You’d think that as SaaS gained adoption, pricing transparency would increase drastically due to the simplification of software use. With SaaS, all you need is a high-speed connection to a product on someone else’s server - and you’re in. But that didn’t happen right away. And even though it’s happening now, it isn’t 100%.
In the last few years, we’ve seen transparency adoption across all areas of the business. Just take a look at this list of SaaS companies exercising transparency in revenue and recruiting. Some of these examples are pretty staggering, especially when you consider how tightly SaaS companies guard their data.
Increasingly, we do see SaaS pricing displayed publicly. Pricing has generally fallen into a number of categories - user- and usage-based subscriptions, with a handful of other customer factors thrown in dependent on the SaaS platform in question. But in many cases, there’s still an unknown when you’re looking for large-scale usage of a SaaS platform - the enterprise version, where they ask you to contact the provider for details.
So how do you ask for (and get) transparency in the SaaS sales process when faced with the unknown? Here are our key tips:
Find out what all the inputs are.
Even though SaaS has simplified our access to software, there are still various factors that can influence the price. It could be anything from the number of user accounts, to the volume of data, to API usage, to access to specific features or subsets of a product. Check out these SaaS pricing strategies to familiarize yourself with some examples.
So before you ask for a specific price for your business, make sure to ask what all the inputs are that determine the price. That way you’ll be better equipped to know what levers you can pull if price becomes an issue.
Provide as much information about your unique situation as you can.
Once you have those inputs, it’s time to go back and understand what your business needs are. Do you know how many users you might need for this specific SaaS tool, or what specific features they will use?
If you’re not a member of the team that will be using the SaaS platform, touch base with someone on the team to understand their needs. What will specific users do with the tool? Are there different types of users who need varying levels of data usage, or access? The more information you can get here, the better you’ll be able to make decisions in the sales process that affect your end price.
If you can’t get an exact price, ask for a range.
The above recommendations are best-case scenario, so let’s look at worst case scenario. Maybe you’re pressed for time, going through a budget cycle and adding a last minute line item, or management is pressuring you to get pricing - fast. There are still ways you can get pricing transparency without doing all your homework.
Ask your SaaS sales rep for a price range. Even if you don’t know all the inputs, the SaaS provider will likely have gathered data on companies similar to yours and the rates they pay (or expect them to pay). They’ll probably ask you some standard questions about your company that are high-level indicators, and then give you a price range. And even if it isn’t exact, you at least have an idea of where you might fall on the pricing spectrum.
Do you have strategies to share for asking for (and getting) price transparency? Drop us a line at firstname.lastname@example.org and let us know.