Comment by jlbooker | Hacker News Reader

Comment by jlbooker | Hacker News Reader

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I'm the CTO of a bootstrapped SaaS product targeting the higher education market. We don't list a price on the website because there are many variables that affect the final price. Every school has their single-sign-on system, for example. There are obviously several popular options, but there's also a whole host of obscure options. Every university IT department has their own preferences about how the integration will go. That very much changes how time-consuming the implementation will be for our company, and thus affects the price. There's no way to know this until we talk about what kind of integration the school wants.

We also vary the price based on school size. Huge research-1 level schools pay more than tiny public liberal arts schools -- and rightly so. The big schools have more funding and more spare cash. They also have bigger, more complicated implementations since they have 50+ thousand students and hundreds of faculty. The size of the school also feeds into how expensive the customer is going to be to service, and thus affects our pricing.

How do I put all that into a single price on the website?

> The big schools have more funding and more spare cash.

There you go. Honest businesses don't make their prices with regards to how much "spare cash" their client might have.

> How do I put all that into a single price on the website?

You divide it into parts that can be priced. If there is a bespoke part you put an hourly rate for that implementation, or daily rate, or any way of counting the rate that suits you.

You can use the projects you have finished to publish examples for future potential clients, where they can compare a little bit and get a rough idea of what it would cost them.

Just getting any kind of price information out there is much better than nothing, because then a potential client knows if it's within their range. You also avoid people who cannot afford your product.

> Honest businesses don't make their prices with regards to how much "spare cash" their client might have.

Yes they do. This is indeed how supply and demand works, companies price what the market is willing to pay, it's just that in this case, the market is a clientele of 1.

Most consumers agree price discrimination (charging two residents of the same town different prices) is dishonest.

Enterprise deals are not the same as consumer deals. Even with consumer deals, I wouldn't expect a consultant to charge a flat fee for someone, it all depends on their needs. If the customer needs more in depth support, it makes sense that the consultant charge more. So too with enterprise deals.

You can come up with all manner of scenarios consistent with your business ethics. I'm sure I'd agree with them.

I just wanted to back GGGP's judgment of vendors who adjust pricing according to customer pocket depth. While I'm at it, your claim that individuals are markets unto themselves is also risible.

All I'm saying is, if all else were equal between a 5 million and a 500 million dollar company, it might not be very ethical to charge them differently. But the point is all else is not equal, they both might have vastly different needs, so it makes sense to charge them according to those needs, where the larger one likely has more complex and thus more expensive needs. Again, it's the same as a plumber charging different prices for a big house versus a small house, based on complexity.

I'd argue it's two different products with very different levels of support effort. Larger customers require much more time/effort than smaller customers. I could list an hourly rate, sure, but most customers don't even know where to begin with estimating how many consulting hours they'd need. I'd hate to lose a customer because they over-estimate the hours and think they can't afford it, or have them underestimate and be shocked later. Every customer is unique and there's no useful way to break it down into a pricing chart.

Let's say we charge everyone the "big customer" rate.. The smaller customers couldn't afford it. If we charged everyone the "small customer" rate, we'd put ourselves out of business by spending far too time on the big customers while not making enough revenue to cover the costs of serving the larger customers. If we're practical about it, the smaller customers just don't have budgets as large as the larger customers. If we want the smaller customers to buy in, we have to reduce the price to something that fits their budget.

I sympathize with big customers subsidizing small customers. That premise applies to all percentage-based sales commission structures. It's not clear whether showing a $1M mansion is any more work than showing a $100k bungalow (certainly not 10X as much), but realtors obviously much prefer the former, and will grudgingly take on the latter for portfolio reasons.

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