Startups Stack Exchange Archive

SaaS and volume discount

How is the typical way to present volume discount to SaaS offering for large accounts ?

If the standard prices are for example $50/seat/month. Should we define an extra segment starting with a fixed minimum quantity (eg: 35 units) that will be proposed with a lower price (eg : $40) ? In this case, is it ok that at the limit it presents a contradiction : 34 x $50 > 35 x $40 ?

Answer 3917

There are no exact SaaS pricing models and formulas that I'm aware of. Luckily, those aren't that important, as pricing and discounts are things that you can easily change later on.

  1. You can very easily start with any price that you find sufficient at this point.

  2. Furthermore, bear in mind that you don't necessarily have to offer any discounts.

Reasoning behind these claims follow.

Once you have a product that people are using and paying any money for, you can start analysing ways to maximise your profits. The ideal pricing depends on your customers, their needs and your product, and it's likely something that you'll learn only just later. That's the reason there are no ready pricing models to copy, since softwares differ highly in value they produce to their varying sort clients.

Even if you don't study your old and new customers and their reaction to different pricing schemes you may try for a change, it's highly likely that people will contact you and ask for prices and offers that would be in their price range. You can ponder the issue at that point.

While it may greatly increase sales if you have multiple pricing tiers and you may win customers by having nice discounts, it's the service you're offering they're after.

Your service is hopefully going to be around for years, and it's likely to change during that time. Be open to changing your pricing as you go, too. Just don't go around asking people how much they'd pay.


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