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0 pointswrs2y ago0 comments

This could occasionally be true, but in my experience it’s much more common that this is a signal that either the vendor’s internal processes are stuck in the early 2000s, or they are indeed going to run an arbitrary negotiation process to drive up prices.

I had one large, famous call center vendor who were running on a monolithic Java backend in their own data center, with a six-week implementation time for a completely vanilla configuration, and for which the simplest change required a professional services engagement. There is no technical reason the entire thing couldn’t have been done with self-service signup and configuration, and indeed that’s how their smaller, younger competitors do it.

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5 comments · 2 top-level

cush2y ago· 3 in thread

Whether the vendor's internal processes are stuck in the early 2000s or not doesn't negate anything I said. The quotes are multi-variate and it's not extortion.

But even assuming updated systems, how could you give an accurate quote without understanding the customer's needs? Make someone fill out a big form providing estimates of their usage? Now you're just putting the customer on the hook for generating the quote. The sales rep can translate their requirements into an accurate quote without putting the burden on the customer to understand the product more than they need to. Also, the customer may need the quote to land a contract.

The complexity of the software's pricing is a reflection of the complexity of the customer's needs.

wrsOP2y ago

I don’t want a quote. I want pay-per-usage. If I get big enough to demand a discount, we can talk about prepaid credits. I’m not scared of multi-variate pricing - I’m an AWS customer, for goodness sake, I can handle that quite well already.

Actually, AWS has a call center offering, and look! Self-service activation, usage pricing right there on the page, even a free tier to try it with — or of course you can contact sales if you want to. How do they do this? Their technology isn’t from the early 2000s.

(And giving a customer a quote so they don’t have to understand the product? That just sounds like a bad idea all around…)

cush2y ago

> I don’t want a quote. I want pay-per-usage.

That's good for you. Your very specific example is one that seems to worked out for you in your very specific case. My point is that sometimes usage isn't so easily measurable and is multi-variate. You might not be able to calculate the cost with simple multiplication, especially when there's many SKUs. Say you offer 100x services, but the customer only needs 10 of them. Are they going to look through the list of your 100 offerings, mapping their requirements to what you offer and hoping the math works out? Probably not. It's way easier to talk to an expert at the company and understand if the product is a good fit and get a proper quote. A good sales meeting saves both sides so much time and money.

> And giving a customer a quote so they don’t have to understand the product? That just sounds like a bad idea all around…

You've fallen into the classic HN trap of assuming that everyone that uses software is also a software developer. Sometimes, you're selling to the HR rep or a CxO. They don't have to understand the implementation details of the product to understand whether it meets their needs and if it is a good investment. If you have to go deep into API calls while explaining the price, you're going to lose the sale.

wrsOP2y ago

From my experience, your example is the one that’s on the end of the bell curve. A sales team that goes through a list of 100 things and hand-crafts a bespoke package for my needs would be amazing.

I could list several big SaaS names where you always seem to end up in the same place: SSO is bundled with a bunch of other stuff you don’t need; at renewal time user counts always ratchet up, regardless of actual active users; increases in unit price of things you do need are “compensated” with “discounts” on things you don’t need or calculated off a nonexistent price that was never an option in the first place.

It has nothing to do with selling me what I need. If I ask if it can do what I need, frankly much of the time the answer is a lie, or close to it. Or the answer is “we don’t know, but sign the contract and we’re sure Professional Services can take care of it for you”.

Yes, if you actually want to use the APIs it’s even more of a disaster, but that’s not what I’m talking about.

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Rastonbury2y ago

If you are selling software to enterprise that's 100k a year and multiple SKUs, buyer will want to negotiate and not just discounts, its volumes, payment terms, contract length all of which affect price. If only it were so simple

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5 comments · 2 top-level

cush2y ago· 3 in thread

Whether the vendor's internal processes are stuck in the early 2000s or not doesn't negate anything I said. The quotes are multi-variate and it's not extortion.

The complexity of the software's pricing is a reflection of the complexity of the customer's needs.

wrsOP2y ago

(And giving a customer a quote so they don’t have to understand the product? That just sounds like a bad idea all around…)

cush2y ago

> I don’t want a quote. I want pay-per-usage.

> And giving a customer a quote so they don’t have to understand the product? That just sounds like a bad idea all around…

wrsOP2y ago

From my experience, your example is the one that’s on the end of the bell curve. A sales team that goes through a list of 100 things and hand-crafts a bespoke package for my needs would be amazing.

Yes, if you actually want to use the APIs it’s even more of a disaster, but that’s not what I’m talking about.

1 more reply

Rastonbury2y ago

j / k navigate · click thread line to collapse