Ask HN: SaaS pricing for B2C && B2B (ex. 37s, Wufoo) | Hacker News Reader

Ask HN: SaaS pricing for B2C && B2B (ex. 37s, Wufoo)

16 pointswensing11 comments

If you go to http://basecamphq.com/ you'll see a lot of top-tier company logos. If you proceed to the famous "See Plans & Pricing", you'll see the max plan is $149/mo.

Similar story with Wufoo: Clients (http://wufoo.com/clients/) -> Pricing (http://wufoo.com/signup/).

The max plans are largely 'unlimited', which brings me to my question: are 37s and Wufoo really only extracting $149/mo or $199/mo out of these Fortune 100/500 companies? If not, what do you think they're doing?

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(Long comment here. Hear me out :)

When you see a Big Corp logo on a small-ish SaaS company site, it's not the whole company using it. Just a small team.

Even when a plan says "unlimited," I can promise you multiple people in the same company are buying overlapping services. Why? Because folks want their own username/password/account management. (Plus they probably aren't even aware somebody else in their giant company is using it. I can pretty much guarantee they aren't IT-driven purchases. Not that they shouldn't be.)

As somebody else pointed out, employees can buy pretty much anything up to $1000 without approval from a higher up.

When things truly are being used by an entire large company, (driven by IT) they usually have some sort of account management/identity system that can hook into the company's own system (almost always Active Directory). Things like Google Apps or Salesforce, where you really don't want overlap (because you want to manage groups and permissions) have this capability AND don't have tend to have unlimited plans. (Unless specifically negotiated, you pay per seat.)

(In the future, OpenID or whatever evolves from its principles may replace it. But in the enterprise, SAML/AD/LDAP is kinda it for now.)

SaaS offerings that talk to these systems and are sold to Fortune 5000 corps typically start at $250,000. Somebody much smarter than I has outlined this strange enterprise price gap ( < $1000 or > $250,000). It was possibly Joel Spolsky. It's not a crazy theory, it's real. (As somebody else in the thread pointed out, anything above $1000 requires approval and lawyers, and is a really expensive for you as a vendor to deal with this for anything less than $250,000).

Tangent:

If you're a SaaS developer and want to sneak into the enterprise, get into Google Apps Marketplace. If you hook your app into Google Apps, any company already using Google Apps can use your app with a little less work (for them) than if you were just a regular web app.

As of summer 2010, there are about 30 Million Google Apps "premiere"(paying or enhanced) users.

Selling to an enterprise at enterprise rates involves a particular kind of sales force and development plan that adds additional costs, decreasing net profit more than you'd expect.

It would detract focus from the core mission of the software — simple communication for small teams. They'd lose their story, which is what sells the product.

Chances are they are getting multiple accounts from each company. In companies this large I imagine that multiple teams would want their own basecamp/wufoo accounts instead of trying to share one huge one (which basecamp/wufoo aren't really built for).

That makes sense ... but of course even then, what would the total be? $300, $500, $1,000/mo? None of those numbers are exceptionally large are they? For a company the size of Kellogg's, et al?

That's the idea, they don't want Kellogg's paying them 50k a month because then if Kellogg's tells them they need feature X they are going to end up doing it to keep that business. This way worst case scenario they lose a couple hundred bucks a month. 37signals covers this in Getting Real I believe, but I can't find the section now.

I definitely get the concept, but there's a large range between 500 and 50k; just wanting to make sure I'm not missing something.

There's an old rule of thumb I read somewhere (can't remember where) that says the maximum amount of money you could charge for "consumerish" software sold in the enterprise was the per-purchase limit on the average manager's corporate credit card. As soon as you went over that it meant getting approval up the org chart chain, and getting approval up the chain meant having a dedicated sales staff to work that chain. As soon as you need that sales staff, the price of your software need to go up to pay for the additional staff. In other words, it's just as hard/expensive to sell a $2,000 product as it is a $20,000 product, so charge $20,000.

I think the better question is "Are they really selling any of those high-end plans". I would guess very few people/companies actually buy those, but I don't know. Anyone have any info on this?

On his Mixergy interview, Kevin of Wufoo said they sell "the least" of those, but of course that isn't saying much. He might have said more, I don't quite remember.

I've done consulting for MINI, Ford, Pepsi, and talked with CNN, ABC, NBC, Fox, Discover, major music festivals (Bonnaroo) and museums (Tate Modern). My SaaS is used by several large companies and quite a few major educational institutions.

Let me tell you about working with bigco's.

You are never important to them. So, if you have XYZ as a customer, chances are, it's some dude or dudette in one department who uses it for their specific team for their specific thing. It's not as if XYZ USES YOU EXCLUSIVELY!

That's the kind of thing you'd look to charge thousands for. But they don't use you that way. Not unless you're very, very lucky -- or, as I'd look at it, unlucky.

You'd also be surprised at the paltry budgets these bigco's have on offer - because, of course, they're bigco's! Think of the prestige! The esteem! The fact that every major TV network wanted to put something specially crafted by me on millions of television screens, to show they're serious about social media but, uh… the $20k minimum project made them ALL stop calling. Which is why I always brought it up early so they'd stop wasting my time.

Selling to bigco's is crap. Unless it's a nice friction-free couplea hundred a month.

At $199 a month, most businesses don't need any executive approval. They can buy it right there on the spot with a company credit card.

The entire process changes when you get into a particular range, it varies but for the most part $500 to $2000 seems to be the common upper limit. Anything above that can take days, weeks, sometimes even months of going through the process.

I did some consulting for a large company and it took 4 weeks for them to go through the process of sending me around 2-3 grand. It wasn't even "approval" that took so long, it was just the process of going up the ladder and waiting each step along the way.

If the company is large enough that I will never be able to directly talk to the "decision maker" then I pass on it. I don't have the patience to let them run me around in circles.

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