What is enterprise SaaS pricing?

Enterprise SaaS Pricing: The process of setting a price for a more advanced form of a SaaS product that is made to serve the most significant businesses is called “enterprise SaaS pricing.” It considers the buying power of big companies and their specific customization needs while ensuring the vendor can stay in business and make money.

Compared to traditional SaaS pricing, enterprise pricing is:

• Quote-based. Usually, the enterprise version of a product doesn’t have a flat-rate price. Instead, the vendor quotes each customer individually based on its specific needs and requirements.
• Higher in value. Enterprise customers spend a lot more. They need advanced features, integrations, reporting, and customizations available exclusively in the enterprise version. And they need to deploy their systems across multiple business units (nationally and, often, internationally).
• More complex. On average, an enterprise SaaS sale takes eight months to close. They involve as many as a dozen decision-makers, including top-level executives. Thanks to their quote-based nature and number of influencers, they require multiple contract negotiation and approval rounds.
• More human-to-human (H2H). Unlike traditional SaaS sales, which primarily happen online or with 1-2 sellers working a deal, enterprise sales require a lot of live interactions between the vendors’ and customers’ teams. This means more demos, trials, events, and workshops to ensure the product fits precisely into the customer’s environment.
• They are tailored to customer needs. Additional services like onboarding, implementation, building IT infrastructure, custom-coded tools, and ongoing support require SaaS companies to calculate profitability in more ways than one. They have to address the costs of retaining personnel to meet these needs.

Synonyms

• B2B SaaS pricing
• Enterprise subscription pricing
• Enterprise software pricing models
• SaaS pricing models
• SaaS pricing strategy

Why making a strategic plan for pricing enterprise SaaS is important

There will always be a personalized factor when selling to large businesses. That doesn’t mean, though, that sellers should set prices at random.

If you have a good plan, you’ll know how to negotiate when they come up. You can make methods for finding risks, simulate scenarios, and determine your value proposition. Then you won’t have to worry about selling your goods for too little or too much.

Make sure you know your customer base

Customers-to-be usually expect some differences between one customer and the next. They don’t want things to get tough when they start a new payment cycle. People are interested in what they’re buying, how much it costs, and whether the price is fair for what they get.

A transparent enterprise pricing system considers customers’ needs and keeps things consistent. It helps buyers know what they’re getting for their money. The most important thing is that it makes your buyers trust you.

It helps keep the costs of support and customization in check.

When you think about vendor support and implementation, pricing business SaaS gets trickier. Customers who need a suddenly large amount of help could cause you to lose money. On the other hand, possible customers may give up if there are too many limits on customization.

A well-thought-out pricing plan can find a middle ground between these two extremes. By telling your sales team about your enterprise pricing strategy, you’re letting them close deals with customers whose needs fit within those boundaries.

Cost-to-Value Ratio is optimized.

The way you set prices can make or break your business’s bottom line. If you set your prices too cheap, you won’t make enough money to cover the costs of providing the service. People may leave if the price is too high or think it’s too expensive. You lose money in both situations.

With a well-thought-out pricing plan, you can find the price point that meets both customer needs and your needs for making money.

Lowers the cost of getting new customers

If you take too long to decide on prices, you’ll never close a deal. Making the wrong choices will make the negotiations much longer and keep you from getting as many of your ideal customers as possible.

• It already costs a lot more to close business deals.
• Top-paid salespeople only have to close a few deals every three months.
• Usually, other higher-level deal desk staff are involved.
• Full-on demos, RFPs, and tests are what most people do.
• Keeping business customers as customers costs a lot more.

If even a tiny amount cuts the sales cycle time (say, 5–10%), the whole process is cut by several weeks. Not only will your team be more productive (they’ll have more time to work on other deals), but it will also cost less to close the deal.

Increases the growth of revenue

You can balance the initial investment with a higher lifetime value with a transparent enterprise pricing plan.

Setting fair prices for enterprise SaaS contracts immediately speeds up the sales process. That means you’ll make more money faster if you close more deals in a certain amount of time.

But being able to set prices and sell your goods to large businesses has a lot of other perks as well. You can hire the right people to bring on new customers and set up processes, which speeds up the time to value. For that reason, your customers are more likely to use your product if it helps them.

7 Ways to Price Enterprise SaaS

The software monetization model and unit economics are the two most essential pieces for figuring out how much a business SaaS service should cost. Businesses need to use more than one method to get price optimization at the company level.

When deciding how much to charge, business SaaS providers use some or all of the following pricing models:

Model of Freemium

The freemium strategy is one of the best-known ways for SaaS companies to set prices. The basic program is free when you use freemium, but it only does a few things. Customers can switch to a paid version that has more features and functions. It works to get people to buy and raise awareness of your business.

It allows your business buyers to get to know your interface and try it out with a small group of users before committing to the whole thing. If business contracts, this could be why a rivalries it after a few months.

Pricing is based on a flat rate

All prices, even those at the corporate level, are based on flat rates. Customers want simple monthly bills that are easy to understand and can be counted on. This is the first thing you need to think about when setting the price of an enterprise SaaS service. You’ll use it to set a standard starting point and then add more complicated pricing models.

Companies usually set their flat rates based on their customer type. A lot of people will likely want to buy from you.

For example:

• Industry
• Headcount
• Annual revenue
• Number of business units

First, you should set a base price for business contracts. Then, make the method standard based on those factors and set minimums that you can change. For example, a company with more than 1000 users will automatically pay an extra $1,000 per month; if they have more than 10 locations, they will pay an extra $2,000 per month, and so on.

Pricing Model Based on Features

Next, list all the features and services that make your business stand out.

For example:

• Integration of APIs
• Customer training by hand
• Setting up and implementing
• Guarantees of optimal uptime
• More advanced choices for customization

Account manager for you

Dedicated IT help

You might want to have some of these built into your flat rate instead of asking extra for them. Many SaaS companies offer “free” account management and specialized support but charge extra for these services and do not include them in their flat rate pricing.

For custom integrations, custom tools, and any staff needed to put your answer into a customer’s infrastructure? Add an extra fee.

Pricing based on active users

price based on seats is a type of price based on usage. With this plan, you’ll charge clients based on their active users, not just how many people can reach your platform.

When you set the price of an enterprise SaaS, the flat rate usually includes a certain number of users. For anything after that, you’ll use the per-user approach and include in your proposal how much more users will cost.

For instance, you could set a price that lets up to 100 people use your service for free. After that, each extra user would cost $10 per month.

Pricing based on usage

Usage-based pricing is used in some way by almost all software companies.

It could be:

• Pricing based only on usage, like the pay-as-you-go plan
• Flat fees for each extra person who uses the method.
• Customers pay different amounts based on how many people use the service or how much they use it (for example, storage room).
• Value-based pricing means that users only pay for what they use, but the rate is set through negotiation.

How they use your product is one of the most important things to consider when deciding how much to charge an enterprise-level client. There will be a lot of talk about how many people will use the software, how often, and which features are most important to those people.

Different Price Levels

Customers pay different amounts for different types of services with tiered pricing.

• A simple plan with few options that cost little
• A plan in the middle that has more features and costs more each month
• A more advanced plan that comes with all the benefits and costs more
• An enterprise plan with advanced support, customizations, API connections, and prices that vary based on quotes yet are usually much higher

You may also have multiple price levels in your business pricing plan. For example, you could give different feature prices and different services by default to serve completely different groups of customers.

Pricing Model Based on Value

Deals based on value are significant during the negotiation stage because customers will have a say in the final price of your deal.

You’ll need to determine a fair price for your essential services and customizations at the business level. Then, you can talk to customers about their needs and agree.

Example:

• A government body might want all of its data to be kept in-house.
• A Fortune 500 company might make its people go to training sessions.
• A global company may need more than one currency option.

Since it’s a charitable group, a non-profit could try to get better prices.

You’ll likely already have different sets (also calliers”) with flat rates for many of these services. From there, you can start negotiating. The goal is to find a good mix between how much the prospect thinks the product is worth and how much you can make.

Advice on How to Choose the Best SaaS Pricing Model

You would get 100 different answers from 100 companies when you asked how they set their prices. Pricing enterprise SaaS isn’t always a science, and there isn’t a single right way to do it.

When choosing the right pricing plan, every business should follow a few best practices.

First, look at your market.

Even though most SaaS companies don’t share their enterprise price models, you can still learn about your market by looking at public pricing pages and researching your competitors. This will help you determine how much other businesses in the same field charge for similar goods.

You can also find info on G2 Crowd and Capterra, among other places. Customers from the past and present will share their experiences, which will help you understand what they liked and didn’t like about different pricing plans. You’ll also get a rough idea of how much they cost, though this only works for big companies like Salesforce.

Know how much your customers can afford to buy and what they need.

It’s important to know what your target customers can pay and what features are most important to them before setting prices for enterprise SaaS. Reach out to current buyers and do market research and surveys to find out what they’re ready to pay for and what’s bothering them.

• There are a few things you should think about when figuring out who your ideal customers are:
• Businesses have more money, but their budgets and approval systems are stricter.
• They are more willing to take risks but expect a more significant return on their investment.
• The customizations they need will only make money for your company if you can make them standard and sell them to others.
• Start with the services you already have the tools to provide if you don’t know what to give.

Talk to your business’s sales team.

Your AEs and sales reps are the ones who talk to possible customers every day. They know what potential customers want and how much they will pay.

• If you want to set or improve your enterprise SaaS pricing plan, you should talk to your sales team about it.
• What should you ask them?
• How many complaints do they hear most often?
• What do people want to know the most?
• Their spending plans, price forecasts, and what prospects say other people are charging for them
• , are not the same things that enterprise-level and mid-market buyers want,
• It would be best to ask them what each group of customers has in common. Some features and services might be able to be bundled together to make custom deals that fit these needs.

Outline the value offer of your business product.

What makes your item different from others on the market? What services or features do you give that no one else does that people are willing to pay more for?

Write down what makes your product valuable, and then use that list to help you choose an enterprise pricing plan. Then, figure out how to make money from the unique things about your goods that make them stand out from others on the market.

Try out different ways to set prices.

It would be best if you never compared prices A. Customers will be angry because they’ll have to pay more for the same thing.

If you charge more for corporate SaaS than basic packages, none of your customers will know how much or why another customer spends.

You have more room to try out different price models because of this.

Using CPQ and subscription management software to set prices for enterprise SaaS

This is because current enterprise SaaS pricing is so complicated that it can only be done with software.

CPQ software is a vital part of keeping track of prices during the sales process. It makes it easy for sales teams to set prices, adjust solutions, and make professional quotes (all based on predefined parameters for pricing and customization). When it’s time to send the quote to the deal desk for approval, automated approval workflows make the process even faster. Like CPQ, enterprise-grade subscription management software supports different pricing and billing models, such as metered and usage-based billing and pricing tiers. It handles your customers’ billing and invoicing instantly, and you can bill them whenever they want. That way, you won’t have to worry as much about dunning or the problems with managing accounts due in the back office.