[gunapologist99]

As you already know, this is typical for "enterprise" software due to the idea that potential customers will immediately click away if the price seems too high, so you need to let your customer know what value is in your software before they immediately walk away.

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.

[wwkeyboard]

That's a much more generous take than I had. I always assumed "contact us" pricing meant "tell us who you work for so we can google their funding level before suggesting a price to you".

[cj]

Whether or not your company has a procurement department should always be part of the equation when pricing enterprise deals. (Funding is an indicator of whether your company has one)

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.

[jedberg]

> always at least 2 weeks late, as a rule of thumb

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.

[chasd00]

if the contract your client signed said net-30 then wouldn't a 90 day payment incur 60 days of late fees and another invoice? i feel like you could rinse/repeat that forever. It would be like a subscription to late fees.

[kube-system]

If a customer is paying you late because they think you won't/can't do anything about it, it seems the same disregard could apply to their payment of late fees.

[chasd00]

If it’s low effort just keep sending in invoices. You could even write a script to help. The data entry person puts them on an A/R which gets larger and larger as each payment is not made and the past due rolls to the next invoice. Eventually the over 90 A/R will get attention.

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.

[WastingMyTime89]

I mean they will pay them if you escalate to legal but you won’t be able to do business with them again.

[yellowapple]

You'd think "suspend service until outstanding invoices are paid in full" would be in the "things which you would/can do about it" category.

[ganoushoreilly]

Sometimes, they'll go as far as stiffing your payment just because.. what are you going to due, sue a Global 100 entity?

It's absurd, that's why I like working with smaller companies.

[jenkstom]

That's what credit reporting agencies like Dun and Bradstreet are for.

[jedberg]

They usually just reject the invoice with late fees and quote their stated 90 day policy. Also usually they will redline it if you try to put net-30 and just change it to net-90 anyway.

[pevey]

It's up to you if you accept 90 days in a contract or not. And if you accept 90, then it's absolutely within their right to wait until day 90. Why would they not? It was agreed up front.

[cj]

Technically, yes. But in practice, it's rarely worth the time or effort to collect.

[wdb]

One of the bigger accountants firms had a 180 days thing. Madness

[shrubble]

Most companies pay very quickly if you offer 1% Net 10 or 2% Net 10 terms. Paying within 10 days to get a 2% discount is pretty money-efficient from their standpoint.

[Silhouette]

I also recommend this. It seems that some accounts departments are authorised to play absurd games with long delays but they aren't authorised to cost the company more money. They will complain about late fees but everyone likes a discount, right?

[seanp2k2]

Then just price in a 10% overhead for your service of dealing with this game.

[indymike]

As a reformed former VP of Sales, I can assure that this is exactly how it works, except with much better research than Google.

[thrwyoilarticle]

Could you describe some of the research?

[Bilal_io]

I am sure that's the correct assumption for some companies. I don't think it's right regardless how big the customer. But there are always exceptions, the size of your customer's business may affect your effort for onboarding and continues support, and therefore you may charge them different.

[jabroni_salad]

That's definitely true... I mainly service financial institutions and their asset size is part of the calculation.

[stubish]

Oh, it doesn't always mean personalized price gouging. My take was always simply that the product is overpriced to the point the vendor needs to employ a full time salesperson to make you want it. I think that was why I've always avoided making those calls. Not only did I know I was going to be annoyed, I was going to have to pay to be annoyed. "contact us" pricing was always the last option to try, especially from the well known brands.

[e-clinton]

Same thought here. If I see “contact us” for pricing, it means you’re gonna try and screw me over somehow. I usually avoid those even when I have a large budget.

…hell, if I have to speak to a human when I don’t think it’s necessary, then we probably won’t do business.

[tevon]

This is real too. Prices are never fixed, was one of the first things I learned form my GSBer cofounder. In the "regular" world, the price is usually the price. In the business world it almost never is

[colinmhayes]

Price discrimination is good actually. Why shouldn't you charge the fortune 500 company more than the cash strapped start up? Good for your business, and lets you sell to the startup for less and still have the same revenue.

[yellowapple]

I mentioned this in a different HN thread today, but I'm gonna say it again anyway: if I can get a publicly-available "standard" price for launching something into outer fucking space¹, it's absolutely ridiculous that I can't get the same for something multiple orders of magnitude cheaper. Will that "standard" price be negotiated? Sure. Whatever. Just throw out some number instead of forcing the buyer and seller to mutually waste each other's time on basic information gathering.

----

¹: https://www.spacex.com/media/Capabilities&Services.pdf

[vitiral]

I'm a big SpaceX fan, but I know the prices are published for the fans (they make good PR). For those looking to launch things into space calling the three existing providers is not a serious barrier to entry.

[site-packages1]

I think the comment you’re responding to answers your response. Pricing isn’t opaque because they cannot determine a standard price, but because they don’t want to scare people away.

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…

[yellowapple]

> they don’t want to scare people away

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.

[imagine99]

> As a general rule, any software which requires "contact us" is going to be somewhere between $50k and $750k

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".

[reaperducer]

it's just annoying to the extreme

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.

[jklm]

How did this work? Did they put $10,000/mo on their website?

[bilekas]

Yeah maybe I'm a bit more cynical than you but the idea of contact us pricing for me has always been "dependa how much money you have and how much we can squeeze" also the idea of guaging how "critical" the service is for you.

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.

[brookst]

Depends on the product. If it's off-the-shelf and every customer just does DIY deployment, 100% agree.

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.

[TeMPOraL]

Or, if you're dealing with a startup, there's a chance the product doesn't actually exist and they'll want to lock you in a deal that gives them more concrete requirements and funds the MVP. This is based on a bet that programmers can crank out code faster than the enterprise customer can finalize the deal.

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}".

[Spivak]

It has never ever been a bad strategy to get paid to build a product rather than building something and hoping there’s a market.

This is the way to do enterprise sales.

[TeMPOraL]

Right. My point is more about misleading presentation. The landing page will try to convince you the company is offering an amazing product that will solve your problems, when the reality is, the product doesn't exist and the company is trying to get you to fund it.

[bilekas]

It's funny you bring this up because a startup i was involved in at the beginning did something similar. I was one of the seniors and we would have proposed "ideas" for what could be done with the product. The next day the sales people were selling those features .. unfortunately it created a huge divide between sales and development that ultimately couldn't be overcome.

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.

[mozman]

Vendor list pricing is absurd. Real story but using made up numbers below:

I spoke with a vendor last week who came in at 500k. I told them my budget was 250k, price came back at 255k.

[duncan-donuts]

Then your renewal comes up and you’ve already spent another million in salaries and bespoke shit to make it work for you and the sales guy hits you with 500k again because you’re in too deep.

[stubish]

Cisco was legendary around here (20+ years ago when I was around networking). They would win almost every tender, often with quotes below cost if that is what it took. And everyone in the know knew you would be paying much, much more over the next few years with support costs, renewals, etc. The first hit is free.

[to11mtm]

Bingo

[Sohcahtoa82]

Because they'd rather get $500K, but getting $255K is better than getting $0K.

[Jayab]

Because the service costs them $40k. I've seen this in the physical world with markups like this in captured industrial markets.

[Spivak]

No it doesn’t this makes zero sense. $40k is way too much for operational costs and way too little for human costs.

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.”

[stevage]

I mean that's how I would price it too.

[lazide]

Those sales people do ‘squeeze’ out a lot of $$$, and it’s also how they often get competitive and product intelligence. What other products is the person using, what expectations/requirements do they have that we might or might not be meeting, etc.

[rco8786]

> due to the idea that potential customers will immediately click away if the price seems too high

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.

[autoexec]

I read it as: the company doesn't have set pricing but rather has a sales person/department that will charge you more than the next person for the exact same product/service if they have any reason to suspect they can get away with it after learning as much as they can about your finances and only after wasting your time on a high pressure sales pitch.

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 a price as possible depending on how much you can be fleeced into paying

[Thespian2]

We may not like it, but your last point is almost the exact definition of what a "price" is. Things don't have objective "prices" as an intrinsic quality. They don't even have "reasonable" prices intrinsically. A price is no more, and no less than an agreement between buyer and seller to make a transaction happen.

"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.

[autoexec]

> We may not like it, but your last point is almost the exact definition of what a "price" is. Things don't have objective "prices" as an intrinsic quality. They don't even have "reasonable" prices intrinsically. A price is no more, and no less than an agreement between buyer and seller to make a transaction happen.

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 it 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. There's a really big difference between a company who uses their advantage in pricing to screw over everybody for extra profit and one who uses their advantage to personally screw you over in order to take more from you than they could normally get away with.

Publicly disclosed prices that apply equally to everyone puts a boundary on much a company can take advantage of any one person.

[kube-system]

Enterprise SaaS customers are notorious for demanding one-off features, special packages, customizations, or hundreds of hours of meetings. For complicated enterprise products where these requests are inevitable, special pricing is inevitable.

There's a large and very lucrative industry around just implementing SaaS software.

[autoexec]

You're right that for purely custom solutions it's understandable, but a base price could often be made public for a lot of products and services that don't offer one. Certainly anyone asking for something special expects to have to negotiate on what that's going to cost them above the standard price.

[PeterisP]

A base price can only be made public if there exists a base price that would be common among customers - however if it's not priced as a commodity, that's not the case, there simply is not a base price that could be disclosed because there is zero expectation that there should be "the same service" available for the same price, or that there is some base price from which discounts are negotiated or something like that. They want to preserve the ability to have wildly different pricing for different customers, and publishing (or even having internally published) some fixed base price works against that.

If they want to sell their services as custom services, that's the business model - and in this case, they want to make a clear point from the very beginning 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.

[kube-system]

It really depends on the nature of the software and the target customer as to whether that makes sense. The spectrum of what "SaaS" is, is just so insanely broad that it's hard to make any sweeping statement here.

[chasd00]

> There's a large and very lucrative industry around just implementing SaaS software.

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.

[rco8786]

That's just an extremely cynical way to describe "pricing". There are myriad reasons why a company does not have a fixed set of prices that don't have to do with fleecing anyone, being embarrassed, or trying to hide the fact that they charge more than competitors.

[Xaena]

Having worked on pricing strategy, this is not what I've seen as the norm in B2B. If you're talking to an early company that is still working on product market fit, maybe, and definitely if you ask for your own features.

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.

[rco8786]

Sorry how is that at all different than what I said?

[cykod]

So that’s what I used to think (Price hiding to avoid sticker shock) But now I am convinced it’s a little bit the price point but more when there is variability in the pricing, and the pricing is done by a sales team that has flexibility on what they charge you (these companies always will ask for a budget and tailor the quote to what they can squeeze)

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.

[scrollaway]

There is variability but in my experience it’s good variability, not bad. Every time I’ve gotten “contact us” pricing I have been presented with a slide deck “this is what we usually charge for companies with your needs”, and the sales call was to allow me a chance to negotiate the price down (or eg lock in a multi year contract for cheaper.

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.

[yamtaddle]

Don't forget that "contact us" pricing also gives vendor managers something to do, and the ability to brag about whatever discount they negotiate (and it hardly matters if everyone gets that "discount").

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.

[autoexec]

> 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"

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.

[yamtaddle]

You usually end up introduced to one or more highish-level support and/or integration engineers as part of the sales process. If their sales folks don't volunteer to drag one or more into the conversation, they probably will if you ask.

[chillfox]

Last time I had to deal with the contact at x due to something going wrong they were worse than useless. They broke the product with an update and when we asked to roll it back they organised a full sales team which was presented to us as a call with engineering, except they were trying to sell us on another product to solve a different problem and just ignored all questions about the product we had bought.

[bachmeier]

> 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.

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.

[lumost]

It took me a long time to understand why companies price this way. The reality is that many viable SaaS businesses have fewer than 100 customers. If each customer pays you 1 million a year that's a hundred million dollar a year SaaS business commanding a valuation of 500 million dollars or more.

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.

[malfist]

Counterpoint: https://www.spacex.com/rideshare/

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.

[WastingMyTime89]

The keyword here is estimated. That’s only a ballpark number. I think they did that because they were severely undercutting the competition and they want people who wouldn’t have thought about it to call their sales team. It’s not the final price.

[clnq]

Estimated is fantastic. That's almost all I need before deciding who to buy practically identical SaaS from.

[malfist]

Exactly. These SaaS products all what to try and trap you into sunk cost fallacies. Estimates would be fantastic.

[macspoofing]

>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.

Not quite .. their "Enterprise" package only has a "Contact us" option (no pricing details).

[sam_bristow]

I'm fine with having a "Contact Is" at the top end of a pricing table. At that point you've probably got some pretty unique requirements and there's likely some level of customisation involved.

[grumple]

For the average SaaS I suspect this hurts sales. As someone who often gets to choose what services we pay for, any service where I have to send an email, or worse, involve our finance or accounts payable department and get non-technical people involved at the very start, it's a huge disincentive.

[RajT88]

Having worked for an "enterprise" software biz, this is often because different customers can pay wildly different prices for the same software licenses. Often tailored less based on volume discounts or license type, and more around a customer's ability to pay.

[kube-system]

And also based upon how much of a PITA the customer is. Sales cycles, compliance documentation, configuration, training, support, etc, can really vary between customers.

[WastingMyTime89]

> As you already know, this is typical for "enterprise" software due to the idea that potential customers will immediately click away if the price seems too high, so you need to let your customer know what value is in your software before they immediately walk away.

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.”

[marcosdumay]

> 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.

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.

[maccard]

> 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)

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.

[hodgesrm]

Sometimes 'contact us' for pricing is just a way to get potential customers to talk.

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.

[mc32]

In an odd twist, We've had calls where the provider's questions almost asked we prove we should onboard their solution. I guess there are people who try to onboard a wrong solution and then bad-mouth a provider as not solving their need, but I think that could be "solved" with trials --that most of these solutions provide anyway.

[juancn]

There's also the ROI argument, enterprise pricing in many cases comes with a ROI estimate that requires quite a bit of involvement in understanding the potential customer use case.

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.

[hsbauauvhabzb]

I’m interested in this level of pricing. What are the breakpoints typically? Per-user, $-per-(record|gb|request), then ‘do what you want site wide’, is there any other aspects other than support / consulting times, etc?

[j0hnyl]

Where is this general rule of $50k-$750k established? I think there are tons of saas products that target enterprises that are as low as ~$2k/month and up and require "contact us".

[brianwawok]

FWIW there are SaaS products in my field with "contact us" pricing that start at 1-1.5k per month.

But yah, they for sure aren't going to be $49 or whatever a month.

[twawaaay]

There are also companies that do not really have a price list, they will just think up the price depending on what they think you are willing to pay.