Ask HN: “Contact Us” Pricing

A lot of good feedback here. One additional thought I'd provide is that I wouldn't rule someone out based on a "Contact us for price" button. I'd click the button, let them know what you need, and then let them rule themselves out based on their responses. Sometimes they may give you a price directly in their response (or at least a ballpark), sometimes they may insist on a call. Take the call, but draw the line where you're comfortable (e.g. give me a ballpark after 30 minutes or I'm out - you can be more tactful in your wording).

Think about it from the company's perspective. Let's imagine as a company, you do an experiment where you have one landing page that shows the pricing, and another landing page that says "contact us". Let's also imagine that your product is enough of an enterprise solution that no one ever buys it without talking to someone at some point during the evaluation process (even if the pricing is up front, it requires enough of an investment that the customer wants to be absolutely certain it will satisfy their needs both now and as they grow). Finally, let's imagine that you have 3 full-time sales people to handle the incoming communications at whatever step of the evaluation process.

Now, if the outcome of this experiment is that the "contact us for pricing" results in 1/5th the incoming contacts, but those then convert twice the rate, you might choose the up-front pricing (2x conversion rate but on 20% of the leads means only 40% the sales compared to up-front pricing).

However, what if the 5x incoming contacts is too many for your sales team of 3 to respond, causing the up-front pricing to result in fewer sales with more work? Then you might choose the "contact us for pricing".

But what if it's so many more incoming contacts at a consistent enough conversion rate that you can justify adding a 4th and 5th sales person to realize those sales? Then you might choose the up-front pricing.

But what if the up-front pricing pigeon-holes you into your beachhead market and makes it more difficult to expand vertically or horizontally, which could lead to a trail-off in the incoming contacts and sales? Then you might choose the "contact us for pricing".

The point is, the one that makes the most sense for a company depends on a lot of variables, most of which would be opaque to an outside observer. Being able to tell the difference between a company that has "contact us for pricing" because it made sense for them, compared to one trying to exploit price discrimination (as described by some of the more cynical takes) is next to impossible without talking with them. Even in that scenario though, if they end up giving you a better product for a better price, then being willing to reach out to them could end up being a competitive advantage for your company over another which disqualified them on that basis.

"Professional" subreddits, such as /r/MSP, as well as the Spiceworks community will have answers for some of those, depending on what kind of SaaS it is exactly. Ask, oftentimes (former) vendor reps or happy/unhappy customers lurk there and are happy to help you out, although their info might be outdated - but it may help for a first orientation.

(I, too, consider price-hiding the bane of my existence and wish I could get those days and months of lifetime back that I spend going through useless "demos" and "quick calls with an evangelist/key account manager/person who nopes out at the first technical question".)

Another strategy is that you prepare a long-ish text that you email to a - perferrably senior - sales contact at each company, ideally one that has been referred to you (again, the above-mentioned sources may help).

Just change the name and first line mentioning their product and outline that "due to internal restructuring" your company will decide yea or nay "on doing a PoC within the next three working days" (i.e. you don't have time to waste on demos), that you are already very familiar with their product in all details from an earlier job, in fact, you want to recommend to your CTO to buy it, and that you wish to receive nothing more than their current pricing for $detailedreqs asap. Be overspecific as to your reqs and specs, so they can't weasel out with "it depends".

You might need to go one or two rounds where they try and talk you into doing calls/demos regardless but they will often CC more senior or local reps whose contacts are not public and if you push back repeating what you said in your first email but shorter, they will usually relent, especially if there are competitors in the field and they're getting afraid that the lead may go cold.

This strategy works maybe about 78.3% of the time but will likely fail if the SaaS offering does require extensive and bespoke customisation for your organisation.

Good luck, I really don't envy you having to go through this, to me it used to be like running the gauntlet.

TL;DR: use a SaaS procurement vendor like TropicApp.io or Vendr.

Long version: First, my heart goes out to you. I was in charge of a lot of SaaS procurement for a number of years, and even as our company grew and our ability to pay went up, the lack of pricing transparency only became more frustrating to me! It used to be: “if we have to ask, we can’t afford it,” but then it became, “we can likely afford it, but it would be nice to make sure we should even talk to this vendor or industry before sitting through long eye-rolling sales calls.” (Or even worse, the 15 minute sales call with an intern to get you as a lead before you can talk to someone who knows anything.) but my blood pressure is rising, and I digress…

To level the playing field, we recently signed up with one of the “SaaS procurement” companies that has made this MUCH more tolerable. We use TropicApp.io, and have been happy with them and how they do business. They help us find and negotiate purchases. Even before we buy something, we can ask them stuff like, “we need a tool to do X. What are people using these days, and what is ballpark pricing and pricing model for a tool like that?” They (and their competitors) charge a percentage of the money they save you. They can’t help with smaller stuff (less than 5k per year), but are helpful with the rest. (Not affiliated with them or any competitors like Vendr.com - just happy that these companies exist now, and wish we’d found them sooner.)

I'm Ryan -- CEO and co-founder of Vendr.com (YCS19). Since YC, we've become one of the largest software buyers in the world ($2B+ spend processed; 15k+ transactions). But, here's what I don't understand -- why does a company like Vendr even need to exist?

Companies flock to us to buy software because they are fed up with "Contact Sales", opaque pricing, expiring discounts, and the games associated with sales. Buyers of software are rapidly opting out of sellers' sales processes, coming to Vendr, and asking us to do it for them. Sales is broken.

Today, sellers focus on creating sales processes that maximize the leverage and outcomes for the sellers. This creates friction resulting in avg 90 days sales cycles and 20-25% close rates for sellers. Not good. No wonder sales and marketing expense equals ~50% of revenue.

When Vendr's successful, we'll have fixed sales. No more games. Fair pricing, correct and fast buying decisions -- powered by data. This results in a win for the seller (lower cost acquisition; shorter sales cycles) and a win for the buyer (best products win; fair pricing).

LMK if you need help with any of the "contact us" pricing -- we can easily answer this for you. ryan@vendr.com

The premise of your assignment is that the specifics of a customer situation don't affect price. For enterprise SaaS this is not the case. There is no "price list" there is structured negotiation that has many parameters, including:

Total likely value of the business relationship if solution widely adopted inside prospect

What options does winning this deal create? In particular what will the vendor learn and will this relationship open the door to new niches, segments, markets?

What is the value of a reference / testimonial from this particular prospect?

Two related blog posts for startups who need to manage an enterprise sales process:

https://www.skmurphy.com/blog/2008/11/12/negotiate-the-level-of-reference-in-parallel-with-price-and-others-terms-and-conditions/

https://www.skmurphy.com/blog/2013/02/16/price-based-on-your-value-to-the-customers-situation/