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Estd 4.22.2023
Based on our saas pricing book, Price to Scale, the answer is yes—you can and should use a value-based pricing approach for enterprise deals. However, the key is to implement it through clear, well-defined, and transparent processes so it never seems arbitrary or unfair. Here’s how our book advises approaching this:
• Establish explicit value metrics:
Our book emphasizes the importance of quantifiable benchmarks (like enterprise revenue, usage metrics, or ROI projections) that reflect the client’s potential success with your product. For instance, rather than simply “charging more,” you define pricing tiers or rate cards based on specific revenue bands or needs, as outlined in our discussion on modular pricing.
• Use a tailored discounting and approval process:
When dealing with enterprise clients—especially in cross-sell scenarios—the book recommends setting up a separate process. This ensures that discounts or customized pricing are systematically approved based on the client’s demonstrated value, similar to how organizations like Gainsight have approached their enterprise deals. This structured process not only aligns prices with value delivered but also avoids the pitfalls of ad hoc decisions.
• Communicate the value clearly:
The book stresses that when clients understand that pricing is based on tangible benefits (for example, a pricing table that links client revenue bands to specific fees), it frames the discussion around mutual growth rather than arbitrary pricing. This transparency helps reinforce the fairness and objectivity of the approach.
In summary, Price to Scale advises that by basing enterprise pricing on well-defined value metrics and having a dedicated, transparent process for approval and discounting, you can successfully implement a value-based approach that is both justifiable and acceptable to enterprise clients.