I work in a niche area of consulting focused on SaaS sales / pricing.
All this will do is boost the threshold at which companies will even bother to negotiate. Too many people negotiating hard on $4k quotes? They’ll stop negotiating anything below $10k because they know the smart competition will do the same. They will be willing to let you walk rather than anchor a lower price.
They know their competition doesn’t have a significantly different cost structure, so by letting competitors undercut in competitive markets, they can afford to build a better product with the higher margins. Unless there are strong network effects creating a winner-take-all situation (and most of those markets have been claimed), this can work.
Don’t play the race to the bottom. Price is only one factor SaaS buyers use, and it’s like #4 on the list. It can even be a negative sign — if you get 3 quotes and one is way lower then the other 2, the lowest usually gets eliminated.
Comments
I work in a niche area of consulting focused on SaaS sales / pricing.
All this will do is boost the threshold at which companies will even bother to negotiate. Too many people negotiating hard on $4k quotes? They’ll stop negotiating anything below $10k because they know the smart competition will do the same. They will be willing to let you walk rather than anchor a lower price.
They know their competition doesn’t have a significantly different cost structure, so by letting competitors undercut in competitive markets, they can afford to build a better product with the higher margins. Unless there are strong network effects creating a winner-take-all situation (and most of those markets have been claimed), this can work.
Don’t play the race to the bottom. Price is only one factor SaaS buyers use, and it’s like #4 on the list. It can even be a negative sign — if you get 3 quotes and one is way lower then the other 2, the lowest usually gets eliminated.