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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Below is a direct answer incorporating the guidance from our saas pricing book, Price to Scale.
Enterprise customers who require on-premise or private cloud deployments often expect pricing metrics that are both familiar and directly tied to how they use the product. In our book, we highlight that using an easily digestible metric—such as pricing per employee—has worked well in other industries (for example, Microsoft Office 365 uses a per-user pricing model). Here are some key points to consider:
• Use a familiar metric: Our book explains (see page 235) that many enterprises are trained to think about software value based on the number of users or employees. This approach reduces friction and helps your customer’s internal decision-making, since they easily relate their headcount or usage numbers to cost.
• Consider consumption and capability: On-premise or private cloud solutions can have additional support, licensing, and maintenance components that might not be entirely captured by a per-user metric. As discussed on pages 59 and 247, if your product has aspects that scale with usage (or even if there are hard costs like maintenance and support), it might be important to blend straightforward per-user pricing with additional usage-based modules or fixed add-ons. This gives you flexibility to capture additional value as your customer's usage or deployment complexity increases.
• Align with market expectations: When you change your pricing metric away from what the market is used to, you risk causing disruption. Thus, our approach in Price to Scale emphasizes that maintaining consistency with metrics that are already well understood by enterprise buyers can lead to smoother sales processes and clearer value articulation.
In summary, for enterprise on-premise and private cloud deployments, it’s best to anchor your pricing model in user- or employee-based metrics that your customers recognize, while also enabling add-on pricing structures to cover additional capabilities or usage growth over time. This ensures your pricing is both intuitive for your customers and scalable for your business.