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by mattgratt 5675 days ago
Find out what the signing authority of the interested executive is. If you're charging $1 mil +, in many companies that needs CEO/CFO level approval. That's hard to get, especially with a new technology product that the executive may not have time to understand.

If you're selling to a marketing director or someone of that nature, think around $100K.

Signing Authority is life in the complex sale.

1 comments

More importantly at this stage: is the interested executive thinking it'll be a neat solution to a little problem of theirs, or is it someone with ties to senior decision makers considering it to be something that could make a big difference across multiple divisions of the business? If it's the former then you're quite possibly looking at more like $1-10k. If it's the latter then set your sights higher but expect it to take a long time.

The bad news is that just because a company makes $10bn in revenue doesn't mean your product is necessarily worth any more to them than it is to a company generating <£1 million, especially if it's only loosely linked to revenue or closely substituted for by alternatives. Where big companies do pay more it's usually because the scale of the solution being offered is much bigger.

Are there logical units/brackets related to your product offering (per licensed user, per store, per product, per client, per purchase, per click, % revenue generated)? If so, what sort of bracket or average number of users does a smaller client use, and how much do you charge them for it? If it's easy to charge directly per unit, do that. If it isn't, you'll have to gauge expected usage (by asking the client) and give yourself scope to renegotiate at the end of the billing period (preferably six months to a year) if they underestimate. They'll also expect a volume discount compared with smaller companies in lower brackets, but how much they get really ought to depend on two things: (i) marginal costs to you - how much does each additional user/product etc cost to you in terms of support time, computer resources, transaction fees etc. (ii) marginal benefit to them - will they get the additional value from having it for every salesperson/customer/product or is it something where the benefit is automatically companywide and most extra licenses/options are just a nice-to-have