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Ask HN: Can I offer different prices to different users for the same product?

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Re: Ask HN: Can I offer different prices to different users for the same product?

#31

Post by xfitm3 »

solarkraft wrote: post #25
danielvinson wrote: post #4

IANAL, but this is exactly how B2B sales works... you offer an absurdly high MSRP then offer discounts with various incentives based on completely arbitrary things, with the average purchase landing nowhere near MSRP. I'd be careful about pricing this way to consumers since states are now started to see pricing differences as discrimination. See: http://nymag.com/intelligencer/2018/02/tinder-prices-discrim...

> you offer an absurdly high MSRP then offer discounts Which is amazing. It's probably a lack of experience in B2B, but I tend to see prices as "take it or leave it", so if I see an absurly high price I go "Aight, that's a no", instead of trying to haggle. It's just so inefficient having to haggle with every vendor to get real prices for a comparison. Is the sales process anything else than just a huge money sink?

We have someone full time who negotiates with vendors. Vendors are squeezed every renewal. This person handles redlines, etc. A underrated position if you ask me.

Re: Ask HN: Can I offer different prices to different users for the same product?

#32

Post by fpalmans »

In my experience, the 'Request Demo/Quote' or 'Contact Sales' is a bit more nuanced than just price differentiation. Especially when the product is offered by a young and/or small to mid-sized business.

First of all, building a company which can effectively sell to (and support) businesses as well as end customers is far from easy. Unless a company has a proven track record, I'd meet such claims with much skepticism.

Enterprise customer's expectations/requirements from a support, integration, availability, etc. perspective are completely different than those from an end-user. When going through those requirements, it comes down to finding the price at which those requirements can or are willing to be met. For example, an enterprise customer is likely to add clauses into the contract which deal with ownership changes, bankruptcy, option to transfer to a perpetual license (possibly with source code) in case of end-of-support, availability of consultancy services for integration to future tools, etc.

Re: Ask HN: Can I offer different prices to different users for the same product?

#34

Post by joeyj01 »

Every time I think about a price discrimination scenario either in SaaS, airline tickets, or booking a hotel, I see it in government taxation on individuals or corporations as well. If you make more, you have to pay more. Of course, the ones who pay more have some extra perks that come with the price.

Re: Ask HN: Can I offer different prices to different users for the same product?

#35

Post by speedplane »

maxxxxx wrote: post #15
WestCoastJustin wrote: post #7

Yes, totally. This is common practice. A tip though. If you are attempting to connect directly with end users many folks are turned off by a "Contact Sales" only option. You should have something that is totally self serve, like try for $50/month for a single instance, but if you need more seats please "Contact Sales". This gets people in the door. Almost every large company that does any type of enterprise sales wil…

That's probably the way to go. Once you hit five or six figures usually the lawyers will get involved anyway so they can then deal with all the haggling. But something up to high four figures I just want to be able to order it and be done without waiting for months.

> Once you hit five or six figures usually the lawyers will get involved anyway so they can then deal with all the haggling.

This is a common misconception. The lawyer haggling usually has to do with non-monetary contract terms. Price is usually left to the business folks.

Re: Ask HN: Can I offer different prices to different users for the same product?

#36

Post by thundergolfer »

blcArmadillo wrote: post #9

Joel Spolsky wrote a pretty in-depth article about pricing which also covers the "How Much Money Do You Have? Pricing." case which he feels is a bad strategy: https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-...

Thanks for linking. Read through, and felt it was definitely worth the time.

Re: Ask HN: Can I offer different prices to different users for the same product?

#37

Post by vinay_ys »

Speaking as someone who does lot of vendor evals and purchases, I would see it as a structural red flag if I see prices go up as usage goes up (for a given set of features).

Different feature slabs (basic, advanced, enterprise etc) can be priced differently.

At any given feature slab, usual expectation is that after a certain scale, additional usage will be billed close to cost. The premium you extracted at lower end of the usage slab should cover your R&D costs, other overheads and your profits. If you care to up-sell the higher feature slabs, then you can offer a time-limited discount or trial while making it amply clear that this is a one-time discount etc. to facilitate trial.

Having a cost+ model internally and looking at your customer mix and competition in the market will help you price each feature x usage slab appropriately.

Remember that customers expect prices to always go down over a period of time (due to lowered hardware costs, better automation, depreciated/amortised overheads etc). So, it is better to start high and go low than try to do the other way.

Re: Ask HN: Can I offer different prices to different users for the same product?

#38

Post by shoaibali »

To answer your question as is, no - it would be dumb to have different prices for different users for the 'same' product. If you are certain that the value you provide is X dollars, then charge X dollars only - even if they are a 2 member team or a 1000 member team.

On the other hand - if you decide to move away from the license model, you can charge according to seats, etc.

Re: Ask HN: Can I offer different prices to different users for the same product?

#39

Post by rwieruch »

Maybe it's not the thing you are looking for, after I read your question carefully, but just wanted to mention that I do the same for customers depending on their country with Purchasing Power Parity to adjust prices. [0]

[0] https://github.com/rwieruch/purchasing-power-parity

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